Apple's iPad Seen Cannibalizing Netbook Sales

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For the last several years, netbooks have been a booming business for a number of computer manufacturers as consumers look for low-cost, portable machines to browse the Internet and perform other light tasks. Apple resisted entering the netbook market, repeatedly pointing to numerous shortcoming of such devices as it wrapped up development on its iPad tablet device, its own take on how consumers will want to consume music, video, and Web content in a portable form factor.




Fortune today reports on a new note from Morgan Stanley research analyst Katy Huberty that reveals just how dramatically growth in the netbook industry has slowed since the beginning of the year. Huberty attributes the slowdown to Apple's iPad, which saw tremendous publicity leading up to and since its introduction in late January.
As her chart (above) shows, sales growth of these low-cost, low-powered computing devices peaked last summer at an astonishing 641% year-over-year growth rate. It fell off a cliff in January and shrank again in April -- collateral damage, according to Huberty, from the January introduction and April launch of the iPad.
Huberty also cites data from March showing that 44% of surveyed consumers who were planning to purchase an iPad were doing so instead of purchasing a notebook or netbook computer, the largest category of cannibalized products. Notably, over half of those customers were planning to purchase an iPad instead of an Apple notebook, with the remainder forgoing a non-Apple netbook or notebook.




Also of note, a full 41% of those surveyed said that they would be purchasing their iPad instead of an iPod touch, suggesting that Apple may take a hit to that portion of its sales going forward. The news isn't as bad as it appears, however, as Apple is undoubtedly happy to be keeping those customers in the Apple fold and "upselling" them to the more expensive iPad.

Article Link: Apple's iPad Seen Cannibalizing Netbook Sales
 

adrian.oconnor

macrumors 6502
Jan 16, 2008
326
3
Nottingham, England
I'm not sure that many netbook buyers see the iPad as an either or purchase. I suspect it has more to do with everyone who wants a netbook now has one, and there won't be significant demand again until the next big hardware jump gives them a reason to upgrade.
 

alent1234

macrumors 603
Jun 19, 2009
5,663
152
so netbooks were supposed to grow at 500% on average forever? they are a second or third or fourth computer for most people to be taken around anywhere they go. completely discretionary
 

Eidorian

macrumors Penryn
Mar 23, 2005
29,085
291
Indianapolis
I'm not sure that many netbook buyers see the iPad as an either or purchase. I suspect it has more to do with everyone who wants a netbook now has one, and there won't be significant demand again until the next big hardware jump gives them a reason to upgrade.
Atom is extremely stagnant. Other than price, I don't find much value in a netbook.
 

ksgant

macrumors 6502a
Jan 12, 2006
661
194
Chicago
I can totally see this as my Macbook Pro replaced my desktop computer. Now the iPad could replace what I originally got a laptop for.

In the future, I don't see myself ever getting another desktop again.
 

-=XX=-Nephilim

macrumors 6502a
Feb 1, 2009
674
0
Utter nonsense! :)

I would say at very LEAST some 75%+ of people who bought are about to buy an iPad would never consider buying PC net book anyway - hence, no way iPad is slowing down the sales on net books... No chance!
 

drumcat

macrumors 6502a
Feb 28, 2008
706
1,969
Otautahi, Aotearoa
Not "Cannibalization"

This is a different class of machine -- the tablet is REPLACING the netbook as an ultra-portable. The only "cannibalizing" here is fewer sales of ipod touch devices. Otherwise, this is just competitive advantage.

Sorry to be a stickler, but the term was wrong.
 

-=XX=-Nephilim

macrumors 6502a
Feb 1, 2009
674
0
I'm not sure that many netbook buyers see the iPad as an either or purchase. I suspect it has more to do with everyone who wants a netbook now has one, and there won't be significant demand again until the next big hardware jump gives them a reason to upgrade.
Exactly...

Just another propaganda news...

I mean iPad influencing sales of net books!?!?!

LOL :D
 

fabian9

macrumors 65816
Nov 28, 2007
1,112
85
Bristol, UK
I would like to know what the baseline for these claims is - how many sold units did the statistics start with?

So far just over 1 million iPads have been sold (as far as I know?), so is the graph suggesting that there were only that many customer's in the market for a netbook/tablet in this time? Seems like a rather small market in that case - especially considering that not all the people who purchased an iPad would have actually bought a netbook instead.

For argument's sake, let's say that 50% of customers who bought an iPad would have otherwise bought a netbook. So there were only 500000 customers in the market for a netbook or tablet. Given that sort of size of market, it's hardly surprising that the netbook industry as a whole managed to grow their sales by 640% year over year... Hey, my photo sales grew by 1000% since putting my new website online (going from 1 sale to 10 sales is a large percentage increase!) Obviously this sort of growth can't go on forever.

I really doubt it has as much to do with the introduction of the iPad as is being claimed here.

Fabian
 

tommylotto

macrumors regular
Jan 7, 2004
203
0
Instead of just buying a MacBook and carrying it where ever they go, people will buy an iMac AND an iPad. It might shift some people away from a laptop to two products -- a desktop and a tablet, but Apple will keep the iPad dependent on a connection to a computer. So, they will sell a computer somewhere in the deal.
 

amirite

macrumors 6502a
Aug 17, 2009
878
692
Yeah it must be the Apple iPad. It's not like growth was slowing before it was announced or anything.
 

Small White Car

macrumors G4
Aug 29, 2006
10,923
1,230
Washington DC
I would like to know what the baseline for these claims is - how many sold units did the statistics start with?

So far just over 1 million iPads have been sold (as far as I know?), so is the graph suggesting ...
You're missing the point. The iPad has only been on sale for a month yet the slowdown happend much earlier than that.

This is not about the iPad itself taking a literal sale away from a netbook but that the idea of all these new tablets is making people reconsider the netbook. It's all the media attention the iPad's been getting that's doing this, not the iPad (as a literal device) itself.
 

RobBookPro

macrumors regular
Jun 17, 2009
185
0
I would love it if these claims were true but this is a mis-interpretation of the data.

A drop in sales GROWTH does not equal a reduction in the market.

If I have 500% sales growth in one month and then only 10% sales growth in the following month, there are still 10% more sales in month two compared to month one.

All this graph shows is that the netbook market has matured.

Once the market starts seeing declines in sales of 500% then there will be something to consider.
 

RobBookPro

macrumors regular
Jun 17, 2009
185
0
You're missing the point. The iPad has only been on sale for a month yet the slowdown happend much earlier than that.

This is not about the iPad itself taking a literal sale away from a netbook but that the idea of all these new tablets is making people reconsider the netbook. It's all the media attention the iPad's been getting that's doing this, not the iPad (as a literal device) itself.
More people bought netbooks in March 2010 then back in July 2009. Obviously, not many people reconsidered purchasing a netbook on the eve of the ipad launch.
 

Goona

macrumors 68020
Mar 11, 2009
2,268
0
iPad didn't provide any role in this. People are just realizing netbooks are crappy laptops. The only reason that they sold is because they were cheap. Now people have realized how garbage they are, they are being dumped.m
 

CaptainCannabis

macrumors regular
Oct 29, 2007
172
0
They are 2 different markets.

However, Apple has tried desperately to link it to the netbook market. We all know that Apple's core strength relies on creating markets from thin air. They've just done that with the iPad (although I still see no utility in it whatsoever), and as there is a small link to the netbook market, they've tried to exploit it to the maximum.
 

addicted44

macrumors 6502a
Jun 6, 2005
532
168
Yeah it must be the Apple iPad. It's not like growth was slowing before it was announced or anything.
The iPad was announced in January. Lets exclude that month since it considers pre and post iPad announcement sales.

The 3 months before January had YoY sales growth of 180%,337% and 179%. The 3 months after had 53%, 25%, and 5%. Are you seriously telling me there is no difference between the 2 sets (note, the "holiday season" is a non-factor, since its YoY, eliminating seasonality effects). The highest number in the second set is 3 times less than the lowest in the first. Also, sales were not "slowing" before January. It was 180%, up to 337% (thats an increase in growth, btw) and back down to the same 180% (179% to be precise). Thats flat at worst. On the other hand, after January, its 53%, half that to 25% and 1/5th to 5%! Thats a pretty darn strong trend.

Now, it may not be caused by the iPad, but rather something else that happened in January. But no one has been able to point out any other effect which would slow down growth so dramatically in just a few months.
 

fabian9

macrumors 65816
Nov 28, 2007
1,112
85
Bristol, UK
You're missing the point. The iPad has only been on sale for a month yet the slowdown happend much earlier than that.

This is not about the iPad itself taking a literal sale away from a netbook but that the idea of all these new tablets is making people reconsider the netbook. It's all the media attention the iPad's been getting that's doing this, not the iPad (as a literal device) itself.
... The iPad wasn't announced in October 2009 (when the statistics start to slip), and I would be very surprised if the January 27th announcement would have made that much of an impact on the statistic for that month.

All this is showing is that the netbook market is getting saturated - I would consider the impact the iPad has had on the statistic marginal.

Fabian
 

0098386

Suspended
Jan 18, 2005
21,574
2,908
If I was in the market for a new computer/gadget dohickey I'd certainly go for a netbook. It does more, and that's what I'm after. I'd get a high capacity HDD and stick a load of my DVD rips on it, install some Steam games, Word/OpenOffice (or whatever the free ones called), an my work apps and go.

I'd like one but for my my Macbook covers all the above.
 

gnasher729

macrumors P6
Nov 25, 2005
17,137
4,155
Year-over-year sales growth can give you completely stupid results. Take the month when the iPhone 3GS was introduced: Enormous YOY sales growth for that month because everyone was waiting for it. Wait a year: YOY sales growth will probably be negative for the same month one year later, because you are comparing sales for a normal month with the sales in the month the phone was introduced. It seems that netbooks didn't sell very well until September 2008, then sales shot up until about April 2009 and stayed relatively stable since then.

Please show us a chart with actual unit sales. How many were sold every month? Overlay a chart with iPad sales (which would be rather boring: 1 million sold in April 2010, that's it). _Then_ we can look at it and draw any meaningful conclusions. What this chart shows is just absolutely pointless.

I would love it if these claims were true but this is a mis-interpretation of the data.

A drop in sales GROWTH does not equal a reduction in the market.

If I have 500% sales growth in one month and then only 10% sales growth in the following month, there are still 10% more sales in month two compared to month one.
The chart compares July 2009 to July 2008, August 2009 to August 2008, and so on. If you sold 100 in July 2008 and 600 in July 2009, that would be 500 percent growth. If we are only told that the growth is 10% in August 2009, then we have no idea whether your sales went from 100 to 600 July to August 2008 and from 600 to 660 July to August 2009 (which would be quite nice for you) or from say 100 to 110 in 2008 and from 600 down to 121 in 2009 (which would be a disaster). As I said, this chart is completely worthless.
 

fabian9

macrumors 65816
Nov 28, 2007
1,112
85
Bristol, UK
The iPad was announced in January. Lets exclude that month since it considers pre and post iPad announcement sales.

The 3 months before January had YoY sales growth of 180%,337% and 179%. The 3 months after had 53%, 25%, and 5%. Are you seriously telling me there is no difference between the 2 sets (note, the "holiday season" is a non-factor, since its YoY, eliminating seasonality effects). The highest number in the second set is 3 times less than the lowest in the first. Also, sales were not "slowing" before January. It was 180%, up to 337% (thats an increase in growth, btw) and back down to the same 180% (179% to be precise). Thats flat at worst. On the other hand, after January, its 53%, half that to 25% and 1/5th to 5%! Thats a pretty darn strong trend.

Now, it may not be caused by the iPad, but rather something else that happened in January. But no one has been able to point out any other effect which would slow down growth so dramatically in just a few months.
The graph is clearly showing that the drop in YoY sales started to occur in October 2009. The only reason why it picked up in November and January is the holiday season. Without the holiday season, we would probably something similar to the following set of data:

September: 568%
October: 180%
November: 90%
December: 45%
January: 23%
February: 10%
March: 5%

Or thereabouts...

It's absolutely clear that the graph is showing a saturation of the market - I can't help but think that any correlation back to the iPad is a bit far-fetched
...

Fabian
 
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