SAN JOSE, CA: The global economic crisis continues to impact small and medium businesses (SMBs) worldwide. As SMBs rein in IT spending, the latest casualty is spending on replacing existing desktops and notebooks which accounts for the largest chunk of SMB IT related spend.

Techaisle is forecasting that SMBs worldwide will purchase 1.1 million netbooks in 2009 jumping to to 3.5 million units in 2010. Overall, between 22 per cent and 30 per cent of SMBs state they are looking at netbook purchases as they consider upgrading their core desktop and notebooks.

A recent survey conducted by Techaisle suggests that while some SMBs are looking at netbooks as possible replacement for desktops and notebooks, it is more likely that netbooks will be used to augment rather than replace desktops and notebooks.

Based on the survey, it is found that among SMBs two factors are contributing to the adoption of netbooks:

* Highly price-sensitive SMBs are taking advantage of lower prices sacrificing computing power, screen size and gaming ability
* A new segment of mobile device buyers are entering the market expanding the market for mobile computing devices.

Techaisle believes that while overall SMB notebook shipments are on track for a 5.4 per cent growth rate, purchases of netbooks will ultimately lead to lower average selling prices and exert downward margin pressure on PC manufacturers.

"What netbook adoption among SMBs has exposed is a latent need for small, lightweight devices. This demand is being filled by netbooks and smartphones today. However, larger screen sizes are driving netbook prices up and eroding the differences between netbooks and notebooks, putting further expansion of the Netbook marketplace at somewhat of a risk. For the netbook market to expand there needs to be a greater 'value proposition differential' - the subjective and objective differences in user experience between products," says Abhijeet Rane, Partner and Senior Vice President, Techaisle.