Apple iPad blamed for plunging laptop sales

Written by maxikosr on . Posted in Linkbait

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 iPad. iPad popularity is causing laptop demand to dive. An unpleasant picture for notebook sales has been painted. Notebook sales were on a steady upward trajectory in late 2009 before tanking in January 2010, corresponding directly, with Steve Jobs’ unveiling of the iPad.  It is estimated 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 in 2010? 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 with video converter for ipad to convert 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 spreadsheets 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. 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, it is also 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 when 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.

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.

Kindle will crumple under iPad

The debut of the iPad earlier in 2010 threatened to throw a wrench into the gears of e-readers like Amazon’s Kindle. Some 28% of eReader sales will also get sucked up by the iPad. Apple sold three million iPads in 80 days (which is one million more units than the Kindle is rumored to have sold in 2009) and more than 14 million units for 2010. With the iPad 2 on the horizon, the Kindle will have to keep dropping its price to keep up

My unsolicited forecast for 2011 is that once the iPad 2 becomes available, the price will drop as was the case for the iPhone. Apple is rumored to be shoring up the last remaining original iPads to sell while awaiting the debut of the iPad 2, and the price-tag on the original units will no doubt be significantly reduced, which will send sales through the roof—as we saw with the iPhone 3GS when the iPhone 4 arrived on the market.

However Apple plans to cut the price, once it does, consumers will have no reason to prefer the Kindle over the iPad. With the iPad’s e-reader capability and myriad other functions, the Kindle will be rendered obsolete—that is, unless it, too, drops its price, which it likely will. Amazon will be forced to go lower and lower, and it’s my belief that within the next year or so, the price of the Kindle will drop below $100 to keep up with ever-increasing iPad sales.

iPad on Top

Amid indications that Apple Inc. is ratcheting up its iPad production targets to meet booming demand,iPad’s mass sales also stimulate the sale of third-party company’s products, like iPad case, iPad bag, video converter like mac iPad video converter. It is predicted that Apple will ship 12.9 million iPads in 2010, an increase from the previous forecast issued April 2nd of 7.1 million units. Shipments will rise to 36.5 million in 2011 and 50.4 million in 2012.

Apple has hiked its iPad manufacturing goals to suppliers across Asia. As iSuppli stated in its initial forecast, the key to continuing success will be how quickly Apple responds to issues as they arise and whether the company can align suppliers to meet demand needs. iSuppli’s original iPad forecast was by far the most aggressive outlook for the product among industry analysis and market research firms issuing outlooks at the time. Apple’s acceleration of its component demand indicates that the company has raised its iPad production target for 2010. The latest research indicates there is much higher production than previously expected for two key components: LCD panels and NAND flash.

iPad Ad Infinitum

It is believed that the only limitation on iPad sales now is production—not demand. Apple has taken a very controlled approach introducing this product to new markets, with manufacturing limitations likely being the major inhibitor on how quickly iPad sales expand.

To drive continued sales growth, Apple undoubtedly will refresh the iPad’s features in April 2011. Likely additional changes will embrace an internal camera and expansion of the product line, potentially including additional screen sizes.

Nonetheless, with nearly 84 percent share in 2010, Apple’s iPad virtually owns the market, and the device is expected to dominate at least through 2012.