Japan’s Toshiba Corp. has gone against the grain by not rushing to sell netbooks,small, portable computers that are inexpensive cousins to higher-performance laptops,to U.S. consumers.
Nearly all of the top-tier computer makers have added netbooks, also called mini-notebooks, to their laptop computer offerings in the past two years.
But the local operation of Toshiba chose to wait.
“We are laying the groundwork to doing the mini-notebook the right way and not bringing something out to do just for the sake of doing it,” said Chris Casper, group manager, product marketing for Irvine-based Toshiba America Information Systems Inc.’s digital products division.
The company is eyeing a launch in the third quarter of this year to push for back-to-school and holiday sales.
Toshiba has been selling netbooks outside the U.S. since October, but opted to hold off on the domestic market.
It currently sells them to schools in Latin America and to telecommunications companies in Europe, which bundle netbooks with subscription-based 3G wireless networks.
Rolling out netbooks aimed at corporations and schools in the U.S. had “a limited attraction,” for Toshiba, Casper said.
“With what’s going on with the economy, companies are looking hard at capital expenses,” he said.
And readying the netbooks for consumers presented some design problems.
“What we found is that the U.S. customer has a reaction to the very small keyboard on netbooks,” Casper said. “It’s one thing for a smart phone. But if it’s a normal keyboard, it has to be large enough to use comfortably. We saw that as a limiting factor from a design standpoint.”
Toshiba has “been looking at is what is the right size and making sure we have a mini notebook that people can be comfortable using,” Casper said.
The company also held off on netbooks initially because they put a crimp on profits.
“Everyone is looking for a way to make a profit with these things,” said Maciek Brzeski, vice president of marketing for Toshiba America Information Systems’ storage division.
It used to be that smaller machines commanded a high premium.
“People haven’t quite adjusted to the idea of the smaller notebooks being the cheaper ones,” Brzeski said.
Toshiba’s storage unit already sells its 2.5 inch and 1.8 inch disk drives to many top-tier computer makers, which integrate them into their own netbooks.
“You want as light and small a drive as possible, but that has to be balanced with cost,” Brzeski said. “Netbooks are all about cost.”
Fast Growing
The market for netbooks still attracts the same buyers looking at laptops, but they’re a fast-growing subset.
“We see netbooks doing pretty well in 2009,” said Matthew Wilkins, London-based principal analyst of computer platforms research for El Segundo-based market researcher iSuppli Corp.
Wilkins expects some 20 million netbooks to be sold this year, up 70% from 2008.
For all notebook computers, iSuppli is looking for some 162 million units to be shipped, up 15% from 2008.
The market’s so new that consumer electronics analysts haven’t even agreed on what exactly qualifies as a netbook.
“Because it’s a very new product, we are going to get a lot of evolution yet,” analyst Wilkins said. “That means that our definitions will probably change over time,it’s a big caveat.”
According to iSuppli, a netbook goes for under $600, has a screen size from seven inches to 10 inches, local storage (such as a disk drive), wireless networking capabilities, a full “qwerty” layout keyboard and runs a functional operating system.
Netbooks are being billed as “companion PCs” for consumers.
“People are buying them as a second PC, a traveling PC, or as a starter laptop for their kids,” Wilkins said.
Netbooks can be a lot hipper in design than a regular laptop, which has to make room for a compact disc drive, cooling fans and a chunky disk drive.
That allows a company like Toshiba to make its product stand out with cool industrial design, Brzeski said.
“It’s something you will always have with you,” he said. “When people purchase one they consider all of the same things as when they buy a phone,they are buying it as much for the look, style and elegance of the device as for what it can do.”
Until it’s ready to launch netbooks here, Toshiba is still being cautious about its plans.
“This is one of the markets that has yet to play out,” Brzeski said.
