MoneyWatch Tech

Netbook Sales Success Could Mean Vendor Problems

By Erik Sherman

Updated on: July 13, 2009 / 12:24 PM EDT / MoneyWatch

According to projections from DisplaySearch, part of NDP Group, netbook penetration is going to rocket ahead at the expense of the traditional notebook market. But given that user dissatisfaction for netbooks has been enormous, does this mean that success will ultimately mean higher returns, disappointed buyers, and damaged customer relations for hardware companies?

The DisplaySearch expectations are that netbooks, which the company calls mini-notebooks, will capture 20 percent of the worldwide notebook PC market this year as netbook sales continue to explode and, for the first time, notebook sales are flat.

But explosions can be messy, and according to an NDP Group report from June, the potential for shrapnel to head toward the hardware vendors as a result is significantly high. The problem is that many consumers think that netbook and notebook are the same thing and that they will work the same way. The problem is that they don't and won't, which apparently has translated into a lot of dissatisfied consumers:

Only 58 percent of consumers who bought a netbook instead of a notebook said they were very satisfied with their purchase, compared to 70 percent of consumers who planned on buying a netbook from the start.Satisfaction was even harder to ascertain among 18- to 24-year-olds, one of the main demographics manufacturers were hoping to win over with the new products. Among that age group, 65 percent said they bought their netbooks expecting better performance, and only 27 percent said their netbooks performed better than expected.

When a company is in the relatively low-margin PC hardware business, this is not good news, because it sets up the potential for customer backlash and defection, which means more costs to acquire and retain customers. Circumstances suggest that hardware vendors might need to take a number of actions:

Increase point-of-sale education, working with distribution channel partners, to underscore the difference between netbook and notebook in an attempt to correctly set purchase expectations.
Understand what features to stress so that the netbook still seems like something that a person might want to buy, with the emphasis on light and mobile.
Develop a way to co-sell PC-equivalents and netbooks, with the latter being seen as the ultra-mobile companion to the former.
Consider creating an upgrade path for users that are truly dissatisfied with the lower end product.

It seems likely that the situation will ultimately cost vendors more than they bargained for, either in unhappy customers or programs to keep them from becoming dissatisfied. And that's bad news for an industry that lives and dies on thin margins.

Image via stock.xchng user wagg66, site standard license.