Best Buy CEO Claims iPad Cannibalizing Notebook Sales By 'As Much As 50%'

[MacRumors]

In an article in The Wall Street Journal earlier this week on the prevalence of gadgets over traditional computers and TVs for the upcoming holiday shopping season, Best Buy CEO Brian Dunn is quoted as saying that his company is seeing the iPad cannibalizing sales of traditional notebook PCs by "as much as 50%".

Best Buy said smartphone sales continued to rise compared with a year ago, as did portable computer totals, buoyed by the iPad.

However, television sales fell despite the rollout of new 3D models, with both average prices and total volumes notching "low-double digit" declines compared with last year. Mr. Dunn also said internal estimates showed that the iPad had cannibalized sales from laptop PCs by as much as 50%.

"It's a very different environment now," said Stephen Baker, the chief electronics analyst for market researcher NPD Group Inc. "The real cool stuff now will be the tablets, e-readers and probably the higher-end digital cameras."

Several reports in recent months have indicated that the iPad may be cannibalizing some notebook sales. But the degree to which Best Buy, a major retailer even if only a single data point, is seeing such cannibalization appears rather startling. Just days ago, Best Buy announced that it will be expanding in-store iPad sales to its entire network of nearly 1,100 U.S. stores and also increasing the variety of iPad accessories available for purchase as it seeks to ride the device's wave of popularity amid increasing supplies.

Analysts have long been interested in seeing whether the iPad cannibalizes Apple's other products. During the most recent quarter, however, Apple reported record Mac sales of 3.47 million while still pushing out 3.27 million iPads. During the conference call for that earnings release, Apple COO Tim Cook noted that with Apple's share of the computer market remaining relatively low despite strong growth over an extended period of time, the company would be happy to see some cannibalization, because there are "a lot of PCs out there" to be cannibalized.

Article Link: Best Buy CEO Claims iPad Cannibalizing Notebook Sales By 'As Much as 50%'

 

[atomicbatteries]

well, that's a really big surprise!

 

[MattSepeta]

Cannibalizing? Not quite...

If iPad was eating into Macbook sales it would be cannibalizing.

iPad eating Netbook sales is simply one companies product feeding on other companies product sales. Not cannibalism, just regular old eating!

 

[Robert M.]

Strange, people really shouldn't be making a choice between a netbook and an iPad.

 

[Xian Zhu Xuande]

Om nom nom.

Strange, people really shouldn't be making a choice between a netbook and an iPad.

Sure they should. It is silly for a typical consumer to have both.

Edit: Or maybe you're saying there's no relevance between the two platforms? There is. Both seek to provide similar solutions to the same problem: mobile computing. As such, there will be a lot of decision making between the two platforms for consumers, and one can have a direct effect on the other's sales. Even among tech professionals people would like to settle on a tablet-like device or a netbook. Few actually want both.

 

[Robert M.]

If iPad was eating into Macbook sales it would be cannibalizing.

iPad eating Netbook sales is simply one companies product feeding on other companies product sales. Not cannibalism, just regular old eating!

Yup! Cannibalism is eating your own kind, netbooks and iPads aren't one in the same.

 

[mrfoof82]

Strange, people really shouldn't be making a choice between a netbook and an iPad.

This is what I'm thinking as well. As long as Best Buy isn't breaking down sales figures by product segment, we have to assume that they're possibly painting traditional laptops, netbooks and those weird laptop/tablet hybrids with the same brush.

 

[Lesser Evets]

haha I think the dinks that troll here have no idea what the market is doing or why. Netbooks are rarely purchased to do truly productive stuff...they are purchased to fool around on the net. Why would ANYONE want a stinky design like a laptop when they can have a tablet like the iPad? Duh.

 

[Mac21ND]

I've always thought netbook sales were much more about buying a cheap computer, not about buying a smaller internet computer. Because of that, I don't see the iPad really digging into the netbook sales as much as it is the netbook market finally reaching it's peak and leveling off.

 

[adztaylor]

If iPad was eating into Macbook sales it would be cannibalizing.

iPad eating Netbook sales is simply one companies product feeding on other companies product sales. Not cannibalism, just regular old eating!

Well it isn't cannibalizing to Apple but it is to Best Buys sales who sell netbooks. I think that's what he meant.

 

[mdriftmeyer]

Classic

seeing the iPad cannibalizing sales of traditional notebook PCs by "as much as 50%"

Love it. Apple's own notebook sales are expanding and with this news Apple is eating away more of the total OS space with the iOS Platform.

 

[paradox00]

Well it isn't cannibalizing to Apple but it is to Best Buys sales who sell netbooks. I think that's what he meant.

This story is talking about notebooks in general, not netbooks.

 

[ArtOfWarfare]

If iPad was eating into Macbook sales it would be cannibalizing.

iPad eating Netbook sales is simply one companies product feeding on other companies product sales. Not cannibalism, just regular old eating!

This is Best Buy's perspective though, not Apple's. Best Buy sells both products, and so as they see it, the iPad is cannibilizing the netbook sales.

Edit: Darn, adztaylor beat me by two minutes. Darn MacBook keyboard letting him type faster than I do on my iPhone 3Gs (not to mention load pages and log in faster.)

 

[baleensavage]

This is hardly surprising. The biggest competitor that the iPad has are netbooks. It's unlikely that someone who wants a high-end laptop like a MacBook is going to buy an iPad instead, but when given the choice between a cheap PC netbook to browse the internet or an iPad the choice for many will be the iPad. Apple's smartest move when releasing the iPad was to have the entry price under $500. That puts it on par with the high-end netbooks and keeps it from cannibilizing Mac sales.

 

[kharvel]

Apple's portable product differentiation strategy is now completely clear and quite brilliant.

At the low-end of the computing spectrum, they have the iPad.

At the high-end of the computing spectrum, they have the Macbooks/Macbook Pros.

They have NOTHING in the middle. Now it makes complete sense. With nothing in the middle, there is nothing for the iPad to cannibalize. The Macbooks are simply too advanced to be replaced by iPads - they are intended to be used as "trucks" as described by Steve Jobs in All-Things-Digital interview with Mossberg.

Their competitive strategy is as follows: use iPad to take over the low-end and mid-price portable computing markets. Use the Macbooks to dominate the high-end portable computing market.

Apple is already dominant in the high-end market. They're now leveraging the iPad to slowly dominate the low-end and mid-priced markets. The experience by Best Buy bears this out. People will see no reason to spend $400 to $500 for low-grade notebooks when the iPad will do most of the functionality they seek. If they want to do the more heavy-duty tasks such as Microsoft Office, graphics, gaming, video editing, etc. they would go for the high-end notebooks since they provide the most horsepower to do these heavy-duty tasks.

Once again, Steve Jobs has pulled yet another masterstroke. This man is a business genius and visionary of the first order.

 

[ChrisA]

Strange, people really shouldn't be making a choice between a netbook and an iPad.

Why? The funtion of a netbook is just to read email an look at web pages. iPads can do that.

I seriously doubt if many if those Cannibalised notebooks are Apple notebooks. Apple does not sell $400 notebook.

Notice that this 50% Cannibalised number is a "goodThing" even for best Buy. Why else are they planning to extend the iPad to all of their stores? I think Best Buy makes more money selling an iPad then a low-end netbook.

 

[Glideslope]

" My God it's Full of Stars"

HAL 9000

 

[skeep5]

haha I think the dinks that troll here have no idea what the market is doing or why. Netbooks are rarely purchased to do truly productive stuff...they are purchased to fool around on the net. Why would ANYONE want a stinky design like a laptop when they can have a tablet like the iPad? Duh.

i think he just called me a dinky troll. it's go time!

 

[windywalks]

Well, if notebooks don't sell too good, but the iPad sells like crazy then there is something that compensates for what is lost...
The iPad is essentially a netbook so eating through the netbook part of sales is just plain obvious.

 

[whooleytoo]

I'm not even sure what that statement means.

Does it mean laptop sales are down 50%, with iPad sales way up?

Or 50% of iPad sales are instead of a laptop, rather than purchasing an iPad in addition to a laptop.

Good news for Apple either way, mind!

 

[AAPLaday]

Be interesting to see what happens when the Android tablets come out. Will this mean the total demise of the netbook?

 

[Glideslope]

I'm not even sure what that statement means.

Does it mean laptop sales are down 50%, with iPad sales way up?

Or 50% of iPad sales are instead of a laptop, rather than purchasing an iPad in addition to a laptop.

Good news for Apple either way, mind!

My take would be, "in place of Notebook". Quite startling to be honest. I expected this with Netbooks, not Notebooks. Plus, Apple's Notebooks are gaining sales with the iPad.

Maybe Steve signed some deal. Should know in 7 years. On a side note, there are quite a few students at my current in college child's school that have a MacBook and an iPad. They really seen to love the combination. A 13" MB and a Wi-Fi iPad is the same as a 15" MBP, and the majority of Mac's on my son's campus are 13" by a very wide margin. This could explain the trend of Mac Notebook sales being the only current ones gaining?

 

[Don't panic]

Be interesting to see what happens when the Android tablets come out. Will this mean the total demise of the netbook?

probably.
especially when you factor in all the apps, iPad and iPad-like products do what most netbook do, just better.

i would bet the vast majority of ipad owners also have a regular computer and use that for computer stuff.
just like the majority of netbook owners also had a more serious machine for productivity.

 

[iPhoney:)]

The irony is that you are required to have access to a traditional computer to even use the iPad, that's the only epic fail the iPad seems to have in my opinion.

 

[Consultant]

Perhaps iPad is the future of computing?

The irony is that you are required to have access to a traditional computer to even use the iPad, that's the only epic fail the iPad seems to have in my opinion.

Who doesn't have access to a computer?