Netbooks not 'cannibalising' market, says Intel

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Speculation that sales of lower-priced netbooks are cannibalising laptop computer sales is not accurate according to Intel.

Christian Morales, Intel's European sales chief told Reuters it was 20 per cent “less than speculation,” on the fringes of a company event on Wednesday.

He said that netbook sales were about 16 per cent of all notebook sales globally and a little higher in western Europe. He did however say that in Britain and Italy they may account for as much as a quarter of all notebook sales.

Intel has, for now, cornered the fast-growing market for inexpensive netbooks using its Atom processors, and many fear that that fast market growth may be at the expense of higher-priced laptops.

"We have seen some cannibalisation of Celeron by Atom," Morales said in a presentation to analysts in London.

He said Intel's profit margins for Atom were higher than those for the much older Celeron processors.

20 per cent cannibalisation would mean that 20 percent of netbooks sold would otherwise have been sales of full notebooks.

Stacy Smith, finance chief at Intel, said notebooks would be its main growth driver for years to come, propelled by a continuing trend toward mobility.

Morales said that inventories, which had been built up by electronics makers and retailers who had underestimated the impact of the recession, were now seen in balance with demand.

He said: "From an inventory standpoint, we think it is really optimised for current levels of business. Supply-chain confidence is much higher."

Morales said eastern Europe and Turkey were currently the weakest areas of his Europe, Middle East and Africa patch, although Russia and the other former Soviet CIS states had seen some improvement in the past weeks.

He said he saw greater potential to sell inexpensive netbooks in Africa if the cost of Internet access, which he said was more than $100 (£62) a month in most of the continent, could be brought down.

He said: "This is where we are working very actively with governments.”

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