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A Morgan Stanley report says iPad popularity is causing laptop demand to dive
A recent report by Morgan Stanley researcher Katy Huberty has many in the gadget world snarling and gnashing their teeth: the laptop market is plummeting. The culprit? Apple’s iPad.
The report, which was released on Thursday, paints an unpleasant picture for notebook sales. Notebook sales were on a steady upward trajectory in late 2009 before tanking in January 2010, corresponding directly, according to Huberty, with Steve Jobs’ unveiling of the iPad.
This report comes on top of recent comments Best Buy CEP Brian Dunn made to the Wall Street Journal that internal estimates show that the iPad has cannibalized notebook sales by as much as 50%.
But can there truly be a causal relationship, considering the fact that Jobs didn’t introduce the iPad until January 27? The timing would suggest that something else caused a whole month of capsizing sales. And, can we really lump iPad-consumers in with notebook consumers as one and the same?
After all, while the iPad has lots of cool features - like watching cool videos and reading online publications - it's hard to imagine that it can be that easy to use for hardcore laptop users that need to type fast and do some spreadsheet work.
What really gets cannibalized - iPod Touch?
Similar fun-sized hand-held devices, on the other hand, are liable to get swallowed up in the iPad storm, as Huberty’s report shows. While laptops typically have a more functional purpose, the netbook, which one might describe as a smaller, lamer laptop, floats somewhere in that middle ground between functionality and frivolity, and according to Huberty, it is getting sucked into the iPad vortex.
Netbook sales had seen some monstrous growth in 2009, peaking out at 641% year-over-year growth in July. And then suddenly, people realized that netbooks are lame, and down went the sales. But, while Huberty’s report pins the blame on the iPad, there doesn’t appear to be any direct correlation between the introduction of the iPad and the tanking netbook sales. Netbooks were on their way out when they took a dive in October 2009, dropping nearly 400%. They gave a couple of postmortem kicks in November, but then face-planted again in January.
Ironically, Apple’s own iPod Touch appears to be on a crash-course for disaster. According to Huberty’s research, the iPad is on track to cannibalize iPod Touch sales by over 40%. Again, this is another case of bound-to-happen.
While the iPod Touch has many of the same capabilities as the iPhone, minus the smothering monthly phone bill, why would you want to carry around two devices that look like a phone—only one isn’t a phone? At its core it’s really just the iPad’s uglier, less athletic little brother.
Also on the horizon for iPad cannibalization: desktop PCs, which Huberty’s report projects will see some 27% of its sales go to the iPad. Some 28% of eReader sales will also get sucked up by the iPad.
While it seems a little bombastic to suddenly assume that the iPad is going to take the place of desktop PCs and laptops, in terms of price range and portability, it would make sense for someone to go home with an iPad over a laptop if they already own a functional computer. Laptops and tablets are certainly not the same thing, but if it’s portability that the consumer is after, a one-pound iPad makes a lot more sense than a laptop that weighs as much as a baby.
If the iPad's popularity continues to come at the expense of laptop demand, this will become increasingly evident as the tablet market begins to flourish with tablets from Dell, Motorola, and Samsung.
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