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Analyst Suggests 'Tablet Cannibalization' Responsible for Shrinking U.S. Notebook Retail Sales

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Close on the heels of claims from Best Buy CEO Brian Dunn regarding the iPad cannibalizing sales of notebooks at the electronics retail chain by "as much as 50%", Fortune reports on a new research note from Morgan Stanley's Katy Huberty offering visual evidence that notebook retail sales growth in the U.S. has not only slowed but reversed in August and early September. Huberty argues that "tablet cannibalization", obviously primarily driven by the iPad at this point, is responsible for the dramatic turnaround.
Her evidence:

- NPD data showing that after six months of decelerating growth, U.S. retail notebook unit growth fell 4% year over year in August, marking the first time those numbers had actually gone negative.
- Similar data for the first week of September showing that units fell 4% year over year again.
- BestBuy CEO Brian Dunn's widely repeated remarks in the Wall Street Journal that "internal estimates showed that the iPad had cannibalized sales from laptop PCs by as much as 50 percent."
Click to expand...
Notebook sales had been enjoying booming sales growth due to expanding markets and an ongoing shift in consumer preference from desktops to notebooks. What had generally been a 30% year-over-year growth rate in the second half of 2009 and early 2010, with a spike to 70% growth around the holidays, has quickly tailed off in the months since Apple introduced the iPad in the U.S., finally turning negative in August with a 4% decline in year-over-year sales.

It is unclear, however, how a variety of factors may have combined to result in the trend seen in notebook retail sales. Fortune's report does not specify whether netbooks are included in the "notebook" sales numbers, and if not, they almost certainly represent another source of "cannibalization" of traditional notebooks. In addition, other factors such as protracted economic weakness, hardware and software release cycles, and potential market saturation in some areas could be considered for their possible contributions. But Huberty's take is that the iPad, along with newer and forthcoming tablet devices such as the Dell Streak and Samsung Galaxy Tab, will continue to "pressure" sales of traditional PCs.

Article Link: Analyst Suggests 'Tablet Cannibalization' Responsible for Shrinking U.S. Notebook Retail Sales
 
Article Link
https://www.macrumors.com/2010/09/17/analyst-suggests-tablet-cannibalization-responsible-for-shrinking-u-s-notebook-retail-sales/
To me, netbooks and tablets are worthless. I have no need for this middle area between a laptop and a smart phone. It's too small or it's hardware is too crippled.

I can see how parents and old people might dig a simple setup like the iPad. But really, cannibalizing the market? ppfft
 
Why... piggy... why? (lol invader zim reference)

Ok, the laptop isn't dead. The laptop never will be. The business is still going strong. But really? I would buy a laptop over an iPad any day.
 
Ahh, the netbook fad is finally going away. These are pretty useful for traveling or as a tertiary laptop but don't see any real benefit to these at all. Think they're more of a nice-to-have then anything else. If the market gets manufacturers desperate enough and drop prices to $99, then I might get one....maybe.
 
that's a pretty awesome graph. Now show us the ipad graph to go along with it.
 
makes sense if it's netbook sales that were eaten away here. Long as you don't need flash the ipad does pretty much everything you need. Wonder what'll happen if airprint actually takes off, since that could start chinking away at the word processing market as well.
 
h1r0ll3r said:
Ahh, the netbook fad is finally going away. These are pretty useful for traveling or as a tertiary laptop but don't see any real benefit to these at all. Think they're more of a nice-to-have then anything else. If the market gets manufacturers desperate enough and drop prices to $99, then I might get one....maybe.
Click to expand...

The chart is for notebooks.
 
Brinkman said:
To me, netbooks and tablets are worthless. I have no need for this middle area between a laptop and a smart phone. It's too small or it's hardware is too crippled.

I can see how parents and old people might dig a simple setup like the iPad. But really, cannibalizing the market? ppfft
Click to expand...

I think it very blatantly is cannibalizing the notebook market for older people. I cannot count the number of grandmas and grandpas that purchase this device so they can email their families and look at pictures of cats. It really is ideal for older people. A lot of older folks, when purchasing a computer, get a notebook because they prefer to just sit on the couch or in their lazy boy and surf or answer emails. My parents do exactly that, for example. The device really does appeal to older and/or retired people who neither need nor want to sit in front of a desktop just to surf a little. Plus the integration with Apple TV and all of Apple's other services makes this a killer device for that market.

As for a laptop replacement for mainstream users, it depends on what you do. I would really like to see something less iOS and more OSX once the Cortex A9's and larger amounts of RAM start finding their way over to Cupertino.

I have one, but I'll likely be selling it. A few things that are just absolute must haves for me and my work colleagues are USB mass storage functionality and more RAM for more effective multitasking and Safari not needing to reload pages constantly.

Why Apple refuses to give its iOS devices USB mass storage functionality I will never understand. So, so, so many people that I know who have iPhones at work are sick of not having that and needing to still, in 2010, carry around a USB stick. I mean if it's to keep people from sideloading video/audio/whathaveyou as some sort of pathetic "anti-piracy" argument, it fails. Jailbreaking accomplishes that much easier and Apple is trying to plug holes in a sieve with that.
 
Oh boy! We get to re-hash all of yesterday's arguing on the same subject! Yay! :D
 
skeep5 said:
that's a pretty awesome graph. Now show us the ipad graph to go along with it.
Click to expand...

Yep, that would help make sense of the data. It would also be interesting to see a similar chart for MacBooks, just to see if they're being affected.
 
Maybe it has to do with we are in a mega recession and it's not the holidays. I find it extremely hard to think that people want the iPad over a Macbook (enough for the trend to go from 70% to -4% in 6 months).
 
This seems a good example of how market hype occurs. This is being treated as a 'second source' confirming the iPad is taking laptop sales; but it's largely just based on what the Best Buy CEO said. Repetition is not confirmation.

It's hardly surprising that laptop growth is slowing (even reversing) given the economy.
 
This has to be the most mind-numbingly boring piece of 'news' the Internet has ever seen. Whatever happened to the axiom 'quality over quantity'? A graph FFS? Someone is bored.
 
Brinkman said:
To me, netbooks and tablets are worthless.
Click to expand...

Good. Don't buy one.

To others, they're very useful. Slim, light, and big enough to use with more gusto than an itty bitty little iPhone. Provides anywhere anytime ability for some 80% of most computing use (mail, web, lightweight apps, lightweight content creation). Tethers nicely to a gutsy home base machine far more capable (multiple terabytes, multiple monitors, multiple input devices, etc.) than any notebook.

Notebooks are a compromise of power with portable. Tablets embrace their limits and applications, making a convenient extension from the desktop.

I was in the market for a notebook ... until I got an iPad and realized I didn't have to take the whole system everywhere, and am now gearing up for a much more capable desktop.

Naysayers keep thinking tablets & computers are an "exclusive-or" kind of thing, when they're really an "and" relationship. I can do more with a tablet and a desktop than you can with just a notebook.
 
h1r0ll3r said:
Close enough :D
You know of what I speak....
Click to expand...

One of the very few times that I will agree wholeheartedly with Jobs is his comment that "netbooks don't do anything better, they're just cheap laptops".

I never really understood the whole craze but I picked up an Acer Aspire One about a year ago just for sh*ts and giggles to see how well an Atom-based device would function as a laptop replacement. They are slow, require noisy active cooling, have smaller screens, smaller keyboards, crappier speakers, lower quality displays, less storage, etc. And Intel GMA500 graphics utilize the same SGX535 core as found in an iPad. Granted they have more system RAM available to them, but in terms of raw power, they are essentially identical. And don't even get me started on the nightmare that is GMA500 drivers. Intel made a huge mistake outsourcing that entire thing.

For the same price as a netbook you can buy a 2 year old used laptop that's 3 times as fast with quality dedicated graphics or at least better integrated graphics. You won't get 8 hour battery life out of it, but if I need something with really long battery life to stay up to date with e-mails and such, I use my smartphone. And if I need to get actual work done, I work in my office, where power outlets abound.
 
The graph misses Jan to Jun 2009. So you cannot really compare the numbers. Also notebook sales were driven because most people changed from a normal PC to a notebook or netbook. It's pretty much clear that the market is saturated at one point.

Just have a look at the iPhone. The sales numbers now stagnate for almost a year (actually the iPhone loses marketshare currently) because everone who wanted one now has one.
 
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