Intel: Netbook cannibalisation at 20 percent

Intel has given an indication as to how much the netbook segment is cannibalising sales of notebooks. According to Christian Morales, Intel’s European Sales Chief, sales of netbooks is “less than speculation” at around 20 percent. Netbooks have grown at a phenomenal rate since their introduction almost two years ago. Their low prices has certainly provided a catalyst for growth amid the global downturn.

On a global basis, netbook sales were around 16 percent of all notebook sales. This number was higher in Western Europe, with the UK and Italy having a netbook penetration reaching 25 percent. “We have seen some cannibalisation of Celeron by Atom,” Morales said. However margins for the Atom processor are still higher than that for the older Celeron processors.

“The market has not all leapt over to Netbooks,” Intel’s marketing chief, Sean Maloney said. “We’re very comfortable with having established the (Netbook) category. We believe now that Netbooks are an under-distributed product line.” Cannibalization, when it occurs, tends to affect low-end laptops based on Celeron processors, he said. “Atom is eating into Celeron. And we’re quite fine with this,” Maloney said.

However, Intel reiterated that notebooks would be the company’s main growth driver over the coming years and that inventory was now in balance with demand. Indeed, this cannibalisation rate may reverse once CULV-based notebooks start to take off. Maloney believes that CULV is “an opportunity for upsell. We don’t need to give this stuff away. The industry doesn’t need to give this stuff away. We can reach new price points and we can also get paid for it.”