* Netbook cannibalisation of notebook market at 20 pct
* Inventories now seen in balance with demand
LONDON, May 27 Cannibalisation of laptop
computer sales by lower-priced netbooks is currently about 20
percent, "less than speculation", Intel's (INTC.O) European
sales chief told Reuters on the fringes of a company event.
Christian Morales said netbook sales were about 16 percent
of all notebook sales globally, and a little higher in western
Europe. In Britain and Italy they may account for as much as a
quarter of all notebook sales, he said on Wednesday.
Intel has for now cornered the fast-growing market for
inexpensive netbooks, made for simple functions such as surfing
the Web, with its "Atom" processors. 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, referring
to Intel's processors for budget notebooks.
He said Intel's profit margins for Atom were higher than
those for the much older Celeron processors.
Twenty percent cannibalisation would mean that 20 percent of
netbooks sold would otherwise have been sales of full notebooks.
Stacy Smith, finance chief of the world's biggest chipmaker,
said notebooks would be Intel's main growth driver for years to
come, propelled by a continuing trend towards mobility.
Morales reiterated 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.
"From an inventory standpoint, we think it is really
optimised for current levels of business," he said.
"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 a month in most of the continent, could be
"This is where we are working very actively with
governments," he said.
(Reporting by Georgina Prodhan; Editing by Jon Loades-Carter)