Netbook sales to hit 50 million this year

Sales of netbooks – simplified but easily connected small laptop computers – could reach 50 million this year, against zero in 2007, which shows "being cheaper helps", said analysts.

Paul Lee and Duncan Stewart, both analysts of consulting firm Deloitte, identified four crisis-driven trends. They said service providers were giving away or subsidising smartphones, televisions and other devices to build up market share with cash-strapped consumers. And more industry actors were sharing resources such as new fibre-optic networks or by cloud computing – computers networked over the internet.

But mobile television services had failed to take off last year due to their cost, suggesting "this is probably a bad time for new and expensive services", Lee and Stewart said.

The UN telecommunications agency said government stimulus packages must help build next-generation multimedia networks as long as the economic crisis saps funding for IT industry.

"Along with stimulus packages of governments, the ICT (information and communications technology) industry must continue to invest in infrastructure and roll out cost-effective services, such as next-generation networks," said Hamadoun Toure, Secretary-General, International Telecommunications Union (ITU).

The ITU sets international technical standards for its government members and liaises with industry. According to ITU's report 'confronting the crisis' technologies such as netbooks, cloud computing, fibre optic networks and mobile phones show signs of thriving in the cash-strapped environment.

The report also warned that by early 2009 some telecom operators would cut capital spending by 10 to 15 per cent. And when scarce credit is available, financing costs would be an average three to four per cent higher than a year ago.

The ITU stressed funding was likely to focus on reliable projects, such as "players with sound business models, established demand and early projected cash flows."

That could delay investment in next-generation networks, which bring together voice, data and media services in one seamless package and underpin the industry's growth prospects.

It could also diminish the role played by innovators, who have driven the IT and computer industries in recent years.

But innovation was not drying up altogether, according to industry experts who contributed to the ITU report for the Mobile World Congress in Barcelona, which opened yesterday.

The ITU said the harsh financial climate for the private sector could add to the pressure for broader government investment in telecom infrastructure. "Despite difficult times there are reasons to be optimistic," Toure said.

Several governments in industrialised nations have included spending on telecom infrastructure in their planned economic stimulus packages. In the European Union they have included high-capacity broadband networks.

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