• by Mark Walsh , May 29, 2009

Heralding potentially broader sales, netbooks are gaining traction among the digerati in cities such as San Francisco, New York, Miami, San Diego and Los Angeles. New data from market research firm NPD Group shows that major coastal markets are driving netbook sales, which in turn are boosting overall sales of laptops.

Netbooks, which NPD defines as notebook computers with 10.2-inch or smaller screens, are becoming an increasingly popular alternative to larger, more expensive models that may cost $1,000 or more. Typically selling in the range of $300 to $350, they now make up nearly 10% of total U.S. notebook retail sales tracked by NPD. That share, however, goes up to 12.3% in New York, 11.4% in San Francisco/San Jose and 11.3% in Miami.

"It is apparent, by where the most robust early adoption has taken place, that the netbook concept is resonating best in the traditional trend-setting coastal technology markets," said Stephen Baker, vice president of industry analysis at NPD. That suggests that the primary appeal of the devices isn't necessarily their price. For early adopters, "portability has a value over price," he added.

Keeping the focus on convenience and away from pricing is especially important for key netbook players such as Intel and HP as they seek to usher in new, higher-end product lines selling in the range of $600 to $700. "The question is, are people going to gravitate toward something more expensive if they're just looking for portability, or if price morphs into a more important driver here?" said Baker.

Intel said in a news report Wednesday that netbook cannibalization of laptop sales is already at 20% in Europe and as high as a quarter of sales in countries such as Britain and Italy.

Overall Windows notebook sales increased 15.7% for the seven months ending April 2009, according to NPD's tracking of approximately 60 retailers and 17,000 stores nationwide. Without netbooks, the research firm estimates sales would have only increased by 3.6 percent.