Analyst: iPad already eating into netbook sales
updated 07:40 am EDT, Thu May 6, 2010
Morgan Stanley says Apple tablet killing netbooks
Apple's iPad is already having a devastating effect on the netbook market, according to new research by Morgan Stanley analyst Katy Huberty. She notes that year-over-year growth in netbook sales began collapsing dramatically in January, when the iPad was announced, and were almost flat at 5 percent in April, when the iPad shipped. About 44 percent of potential iPad buyers in March were planning to get one instead of a netbook or a full-size notebook, Huberty said.
She added that the iPad had a high potential for cannibalizing several categories. Notebooks were the most likely candidates as a roughly even 44 percent mix of MacBooks and Windows notebooks were at risk, but iPod touch buyers were deemed almost as likely to switch to the iPad at 44 percent. E-readers also have significant sway as up to 28 percent of the market was vulnerable; as expected, desktops and game consoles were the least susceptible to seeing its sales taken away.
At least some of the drop in netbook sales growth in January can actually be attributed to the usual post-holiday drop-off in sales combined with a maturing market, where many of those who wanted netbooks already had them and saw little reason to upgrade. However, the decline in subsequent months, especially in March and April, was uncharacteristically steep and implied that the run-up to the iPad was enough to have many reconsider their netbook plans.
Apple's initial iPad lineup actually sits outside of the majority of the netbook category, with even its least expensive models still occupying the high end of a field where $400 and now $300 systems are more common. Its additional roles as an e-reader and game system nonetheless work to its advantage as it can be less expensive for those who wanted another handheld device at the same time as a netbook-class device.
Joined: Dec 1969
Ouch! What Apple is going to do is likely
add features to the iPod Touch to make it more competitive with the iPad and make consumers want both products. For Apple, trading off sales to a higher ASP product isn't a bad thing.
I'm thinking that netbook sales are declining because they're reaching a saturation point more than competition from Apple's iPad. Even though netbook Windows licenses are relatively low-cost, it will still impact Windows 7 sales if potential buyers are steering away from netbooks. Good news for Apple, bad news for Microsoft. Apple is sitting in a sweet position with nearly no tablet competition at all for maybe about six months.