Good news for Intel: Netbooks not cannibalizing laptops

Fears that the runaway netbook market would siphon off profits from the higher margin laptop market have been overblown. That's the key takeaway from the latest DisplaySearch numbers on sales of laptops (or notebook) computers versus sales of netbooks. "There is a small amount of cannibalization but a lot of it is people buying secondary devices. They are buying something a little smaller and a little lighter for more basic computing," says John F. Jacobs, Director of Notebook Market Research for DisplaySearch, a research consultancy focused on technology markets.

That's welcome news to chip giant Intel (INTC), which had been beating back fears from Wall Street analysts that the lower-priced Atom processors used in netbooks would cannibalize higher-priced microprocessors used in more powerful laptops. Likewise, laptop titans Dell (DELL) and HP (HPQ) have been warily watching sales figures for their full-featured and far more expensive laptop lines even as they roll out better and better netbook lines. The fear was so great that consumer electronics giant BestBuy (BBY) initially did not even want to sell netbooks, envisioning them as a very hard way to make money.