Netbooks Vs. Notebooks: ThinkEquity Sees New Smaller Devices Eating Into Revenues, Profits At Apple, Intel
Is the notebook market slowing down? ThinkEquity analyst Vijay Rakesh thinks so. This morning, in fact, he trimmed estimates on both Apple (AAPL) and Intel (INTC) on concerns about a slowdown in the notebook market. In particular, he thinks the notebook segment is being eroded by the new “netbooks,” ultra small PCs from Acer, Asustek, MSI and Dell (DELL).
“We believe the netbook market is starting to make inroads into the core notebook market as a more price-conscious consumer opts for the cheaper alternative,” he wrote in his Intel note this morning. Intel is addressing the netbook market with its Atom processor, so the company is not being cut out of the food chain; but Rakesh notes that Atom processors sell at much lower price points and carry thinner gross margins. The Atom, he notes, sells for $20-$40 and carries a 45 percent gross margin, while the Core2Duo sells for $140-$250 and carries a gross margin of 56 percent.
