Netbooks NOT Actually Cannibalizing Notebook and PC Sales, Says Mike

Recently many pundits and assorted experts and industry leaders have been spotted announcing that netbooks are actually bad for the computer market as a whole, despite recent reports of record sales projections. This guy Mike though, he makes some pretty good arguments for why those various pundits’ arguments are bunk. Read on as we summarize:

Netbooks are known to run on razor thin profit margins, and the fear is that many consumers are buying netbooks instead of higher margin computers, thus damaging the computer industry as a whole. Compounding the problem, this trend will cause innovation in high end computer devices to plummet as everyone is consumed by this “race to the bottom”, as Sony has famously branded the netbook game.

Should we be afraid of this happening? Quite the opposite – the computer industry should be clinging onto netbooks for dear life.

Mike Elgin provides four main reasons why sales of desktops have slowed, two of which affect notebooks too. The economic disaster has people choosing between netbooks and nothing, he says, not netbooks and expensive ultraportables. Windows 7 has been as highly touted as Vista has been badly torched, and many people are waiting to buy until the new OS is fully released. Mr. Elgin also notes that notebook sales have been gaining on desktops worldwide. Interestingly, his fourth claim is that the downturn in sales is not because netbooks killed innovation – rather it’s because designers had failed to innovate for so long, and that the advent of netbooks might actually cause innovation to start.

He also cites surveys (mixed with his own opinions) that indicate most users have figured out that netbooks stink for daily use, and are only buying them as companions, for light use, or for use in tight places like airplanes.

What do you think? Are netbooks killing innovation and damaging the computer industry, or is it simply a hot item that offers users an addition -and not an alternative- to their computing world?