The iPad Threat to PCs

Discussion in 'Apple, Inc and Tech Industry' started by *LTD*, Jan 28, 2010.

  1. *LTD* macrumors G4

    *LTD*

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    #1
    http://www.businessweek.com/technology/content/jan2010/tc20100127_783646.htm

    The iPad Threat to PCs
    Apple's new computer could erode sales of netbooks and tablet devices sold by PC makers, analysts say


    By Arik Hesseldahl

    Apple's (AAPL) new iPad, a lightweight device that browses the Web and delivers media, may serve as an alternative to netbooks and pose a threat to PC makers.

    While the iPad is not a full-fledged PC, it's capable of handling many of the tasks consumers deem important in netbooks, stripped-down notebooks that have surged in popularity in recent years. In a lightweight package, the iPad provides access to e-mail, the Internet, and digital media such as electronic books. The cheapest version of the iPad will sell for $499, compared with about $400 or less for many kinds of netbooks. "People who are looking at netbooks will also take a very serious look at the iPad," says Charles Smulders of market research firm Gartner (IT).

    That could spell trouble for computer makers such as Hewlett-Packard (HPQ), Acer (2353:TT), and Dell (DELL), which relied on netbooks for growth in recent quarters as consumers and companies delayed purchases of more expensive machines. The number of PCs shipped rose 15.2% in the fourth quarter, compared with a decline of 0.4% a year earlier, according to research firm IDC. "A substantial portion" of that growth came from the sales of netbooks, says IDC analyst David Daoud.

    SILVER LINING: MARGIN SQUEEZE MAY END

    If there's a silver lining in the iPad's introduction, it's that PC makers may need to boost their reliance on higher-priced devices, analysts say. Sales of netbooks can put pressure on average selling prices that if unchecked can lead to narrower margins. "The netbook market has created a race to zero margins," Forrester (FORR) analyst James McQuivey says. "It has created a market where higher-priced, higher-margin notebooks have a harder time selling because consumers think they can get essentially the same experience in a netbook with a lower price."

    So if netbook growth slows, PC vendors may need to refocus their efforts on selling higher-margin traditional notebooks, says Daoud of IDC. "It will bring some needed sanity and new alternatives for the PC industry," Daoud says. "For so long, all they could do was drive down prices. Now they can think outside the box and bring out devices that will compete with Apple at prices they can live with."

    Sumit Agnihotry, a vice-president at PC maker Acer, which sells several netbooks, says the smaller computers will probably keep their place in the PC industry. "The industry has proven that the netbook is an important category," he says. "We think they're here to stay." Still he says Acer is working on a tablet product that will compete head-to-head with Apple's iPad. It's due to be announced in the second half of 2010.

    IPAD WILL TEMPT PC TABLET USERS

    Apple's iPad may also make a dent in sales of existing tablet-style computers, a category that has been available for the better part of a decade but failed to catch on with consumers. Only about 1.03 million tablets were sold in 2009, down from 1.3 million in 2008, according to Gartner. Tablets are generally aimed at businesses that have a specific need for a PC that accepts input from a pen-shaped stylus. Though the iPad doesn't use a stylus, there's a good chance that its thin, lightweight body could lure some business users away from their tablets.

    Harry Labana is chief technology officer of Citrix Systems (CTXS), which makes software that gives mobile devices, including Apple's iPhone, the ability to access software and files on other computers remotely. He sees opportunity for sales of the iPad in areas such as medicine. For example, doctors who want to view patient records or X-ray images can do so from a device like the iPad that connects remotely to another computer where patient files are stored. "Not everyone who spends their work day walking around needs a full-power laptop or a PC to read certain data or to send mail," he says.

    Hewlett-Packard introduced a tablet it calls the Slate at the Consumer Electronics Show in Las Vegas in early January. "The slate category is exciting and will be the focus of multiple efforts on several platforms in the industry," says HP spokeswoman Marlene Somsak. "We'll have a number of products in this space this year and beyond." She declined t comment specifically on the iPad. A spokeswoman for Dell declined to comment.

    Apple says it expects to start shipping the iPad by the end of March. The company may sell 3 million to 4 million in the first 12 months it's available, says Gene Munster, an analyst at Piper Jaffray (PJC). It may sell 8 million iPads in 2011, he says.

    Hesseldahl is a reporter for Bloomberg BusinessWeek.
     
  2. KingYaba macrumors 68040

    KingYaba

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    #2
    I doubt the iPad will make much of a dent, if any, in netbook sales. Netbooks are more functional at half the price. I would hope your average consumer could see that but I guess I could be wrong. :eek:
     
  3. Dagless macrumors Core

    Dagless

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    #3
    As the right honourable KingYaba said above me, netbooks are more functional for a lower price. The iPad might very well be an okay end-user device (even though watching widescreen content is going to be a pain) but I can't do sound recording on it, I can't install Photoshop and I don't think an onscreen keyboard is going to be great for writing essays/articles. Hell the browser doesn't even support Flash.

    As it stands now I'd rather have a netbook. If Apple release an open version that behaves very much like a Macbook then we'll talk.
     
  4. Silvereel macrumors 6502

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    #4
    I can't speak for all netbooks, but as for my HP Mini, sure you can install Photoshop, but the real problem is getting it to work. It tends to be very slow, freeze prone as well as loud and HOT.
     
  5. Dagless macrumors Core

    Dagless

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    #5
    Just as the ones I have used. It's still content creation though, even if it won't be pumping out 300dpi printable works. Many of my university buddies survived their courses armed only with a netbook and lab computers. I can't see the same being applicable to the iPad given it's locked nature.
     
  6. *LTD* thread starter macrumors G4

    *LTD*

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    #6
    • "[iPhone] just doesn't matter anymore. There are now alternatives to the iPhone, which has been introduced everywhere else in the world. It's no longer a novelty." - Eamon Hoey, Hoey and Associates, April 30, 2008

    • "We are not at all worried. We think we've got the one mobile platform you'll use for the rest of your life. [Apple] are not going to catch up." - Scott Rockfeld, Microsoft Mobile Communications Group Product Manager, April 01, 2008

    • "Microsoft, with Windows Mobile/ActiveSync, Nokia with Intellisync, and Motorola with Good Technology have all fared poorly in the enterprise. We have no reason to expect otherwise from Apple." - Peter Misek, Canaccord Adams analyst, March 07, 2008

    • "[Apple should sell 7.9 million iPhones in 2008]... Apple's goal of selling 10 million iPhones this year is optimistic." - Toni Sacconaghi, Bernstein Research analyst, February 22, 2008

    • "What does the iPhone offer that other cell phones do not already offer, or will offer soon? The answer is not very much... Apple’s stated goal of selling 10 million iPhones by the end of 2008 seems ambitious." - Laura Goldman, LSG Capital, May 21, 2007

    • Motorola's then-Chairman and then-CEO Ed Zander said his company was ready for competition from Apple's iPhone, due out the following month. "How do you deal with that?" Zander was asked at the Software 2007 conference. Zander quickly retorted, "How do they deal with us?" - Ed Zander, May 10, 2007

    • "The iPhone is going to be nothing more than a temporary novelty that will eventually wear off." - Gundeep Hora, CoolTechZone Editor-in-Chief, April 02, 2007

    • "Apple should pull the plug on the iPhone... What Apple risks here is its reputation as a hot company that can do no wrong. If it's smart it will call the iPhone a 'reference design' and pass it to some suckers to build with someone else's marketing budget. Then it can wash its hands of any marketplace failures... Otherwise I'd advise people to cover their eyes. You are not going to like what you'll see." - John C. Dvorak, Bloated Gas Bag, March 28, 2007

    • "Even if [the iPhone] is opened up to third parties, it is difficult to see how the installed base of iPhones can reach the level where it becomes a truly attractive service platform for operator and developer investment." - Tony Cripps, Ovum Service Manager for Mobile User Experience, March 14, 2007

    • "I'm more convinced than ever that, after an initial frenzy of publicity and sales to early adopters, iPhone sales will be unspectacular... iPhone may well become Apple's next Newton." - David Haskin, Computerworld, February 26, 2007

    • "There's an old saying -- stick to your knitting -- and Apple is not a mobile phone manufacturer, that's not their knitting... I think people overreacted to it -- there was not a lot of tremendously new stuff if you think about it." - Greg Winn, Telstra's operations chief, February 15, 2007

    • "Consumers are not used to paying another couple hundred bucks more just because Apple makes a cool product. Some fans will buy [iPhone], but for the rest of us it's a hard pill to swallow just to have the coolest thing." - Neil Strother, NPD Group analyst, January 22, 2007

    • "I can’t believe the hype being given to iPhone... I just have to wonder who will want one of these things (other than the religious faithful)... So please mark this post and come back in two years to see the results of my prediction: I predict they will not sell anywhere near the 10M Jobs predicts for 2008." - Richard Sprague, Microsoft Senior Marketing Director, January 18, 2007

    • "The iPhone's willful disregard of the global handset market will come back to haunt Apple." - Tero Kuittinen, RealMoney.com, January 18, 2007

    • "[Apple's iPhone] is the most expensive phone in the world and it doesn't appeal to business customers because it doesn't have a keyboard which makes it not a very good email machine... So, I, I kinda look at that and I say, well, I like our strategy. I like it a lot." - Steve Ballmer, Microsoft CEO, January 17, 2007

    • "The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant... Apple is unlikely to make much of an impact on this market... Apple will sell a few to its fans, but the iPhone won't make a long-term mark on the industry." - Matthew Lynn, Bloomberg, January 15, 2007

    • "iPhone which doesn't look, I mean to me, I'm looking at this thing and I think it's kind of trending against, you know, what's really going, what people are really liking on, in these phones nowadays, which are those little keypads. I mean, the Blackjack from Samsung, the Blackberry, obviously, you know kind of pushes this thing, the Palm, all these... And I guess some of these stocks went down on the Apple announcement, thinking that Apple could do no wrong, but I think Apple can do wrong and I think this is it." - John C. Dvorak, Bloated Gas Bag, January 13, 2007

    • "I am pretty skeptical. I don’t think [iPhone] will meet the fantastic predictions I have been reading. For starters, while Apple basically established the market for portable music players, the phone market is already established, with a number of major brands. Can Apple remake the phone market in its image? Success is far from guaranteed." - Jack Gold, founder and principal analyst at J. Gold Associates, January 11, 2007

    • "Apple will launch a mobile phone in January, and it will become available during 2007. It will be a lovely bit of kit, a pleasure to behold, and its limited functionality will be easy to access and use. The Apple phone will be exclusive to one of the major networks in each territory and some customers will switch networks just to get it, but not as many as had been hoped. As customers start to realise that the competition offers better functionality at a lower price, by negotiating a better subsidy, sales will stagnate. After a year a new version will be launched, but it will lack the innovation of the first and quickly vanish. The only question remaining is if, when the iPod phone fails, it will take the iPod with it." - Bill Ray, The Register, December 26, 2006

    • "The economics of something like [an Apple iPhone] aren't that compelling." - Rod Bare, Morningstar analyst, December 08, 2006

    • "Apple is slated to come out with a new phone... And it will largely fail.... Sales for the phone will skyrocket initially. However, things will calm down, and the Apple phone will take its place on the shelves with the random video cameras, cell phones, wireless routers and other would-be hits... When the iPod emerged in late 2001, it solved some major problems with MP3 players. Unfortunately for Apple, problems like that don't exist in the handset business. Cell phones aren't clunky, inadequate devices. Instead, they are pretty good. Really good." - Michael Kanellos, CNET, December 07, 2006

    • "We've learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They're not going to just walk in." - Ed Colligan, Palm CEO, November 16, 2006
     
  7. stuffradio macrumors 65816

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    #7
    Apple's stock took a hit due to the crappiness of the iPad, until you can do everything you can do on a netbook (no limitations from Apple blocking)... PC manufacturers don't need to worry. (Yes, Apple is also a PC manufacturer)
     
  8. LethalWolfe macrumors G3

    LethalWolfe

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    #8
    Apple's stock takes a temporary hit after every keynote.


    Lethal
     
  9. tuhoops macrumors member

    tuhoops

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    #9
    One thing you're forgetting...the iPad is not the iPhone.
     
  10. joe.pelayo macrumors member

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    #10
    Right, it is a big iPod Touch (with an iPhone you can make phone calls)

    Thanks,
    Joe.
     
  11. miles01110 macrumors Core

    miles01110

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    #11
    ....no kidding?
     
  12. clevin macrumors G3

    clevin

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    #12
    the more you call it a "computer", the worse situation it will get into.
     
  13. MTI macrumors 65816

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    #13
    I suppose nobody wants to be known as the "Zune" of netbooks . . . ;)
     
  14. neiltc13 macrumors 68040

    neiltc13

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    #14
    Absolutely, it would be terrible to know you've produced one of the best devices in class but no one is buying it because another company keeps pumping out inferior but somehow 'cooler' products.
     
  15. *LTD* thread starter macrumors G4

    *LTD*

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    #15
    My how things change.

    So how's the netbook situation looking these days?
     
  16. roadbloc macrumors G3

    roadbloc

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    #16
    I don't think anyone with sense will have doubted the tablets will effectively replace low-end netbooks. But they haven't killed PCs. After all, isn't Apple reporting record Mac sales every year?
     
  17. boss.king macrumors 68040

    boss.king

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    #17
    The day I replace my laptop with an iPad is the day I should be declared mentally unsound. It's a cool gadget, but it can't do anything that a laptop or iPhone isn't more appropriate for.
     
  18. Bernard SG macrumors 65816

    Bernard SG

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  19. Mr. McMac, Nov 2, 2011
    Last edited: Nov 2, 2011

    Mr. McMac Suspended

    Mr. McMac

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    #19
    I sold my iPad and bought an Acer Aspire One netbook a few months ago. I couldn't be happier with my decision. I like full blown applications, not scaled down mobile apps. Plus, multitasking was a joke on the iPad. Just my two cents
     
  20. anotonin macrumors member

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    #20
    lol

    Ipad is selling like hotcakes now because its so cool to be innovative and be stylish. At the end of day, a netbook is worth a lot of ipads.
     
  21. MorphingDragon macrumors 603

    MorphingDragon

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    #21
    Don't start this bull ****.

    The iPad is a computer, whether if your brain says so or not.
     
  22. decafjava macrumors 68000

    decafjava

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    #22
    They're ALL "computers," even feature phones.
     
  23. MorphingDragon macrumors 603

    MorphingDragon

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    #23
    I know that.
     
  24. anotonin macrumors member

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    #24
    Like the Abacus. Its also a computing device.
     
  25. roadbloc macrumors G3

    roadbloc

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    #25
    My microwave is a computing device. As is my car.
     

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