Morgan Stanley: Apple's iPad consuming 25% of PC notebook sales
A new model demonstrating the notebook sales trends over the past year shows a significant market-wide decline since the introduction of Apple's iPad.
Analyst Katy Huberty with Morgan Stanley revealed in a note to investors this week that her firm has assumed that the iPad has "cannibalized" 25 percent of PC notebook sales since its introduction in April. The analyst referenced a claim made this week by the chief executive of electronics retailer Best Buy, who said that the iPad has reduced some notebook sales by as much as 50 percent.
The data from Morgan Stanley Research, based partly on NPD sales figures, shows that notebook sales were up 35 percent year over year in February, but by August they had decreased to a loss of 4 percent from a year prior.
The Wall Street firm has adjusted its projected notebook and tablet sales for the next year accordingly. Huberty now expects PC unit growth to increase 13 percent in calendar year 2010, down from the 15 percent she previously expected. In addition, she sees another 8 percent growth in 2011, decreased from the previous prediction of 13 percent.
Huberty now expects to see a total of 50 million tablets sold in calendar year 2011. That's up from her previous forecast of 37 million.
"We expect tablets to continue to pressure PCs as more vendors launch products (e.g. Dell Streak and Samsung Tab) and Apple expands its iPad distribution (e.g., China and five Latin American countries by September 17)," she wrote.
The figures support findings from a survey released earlier this year by Morgan Stanley, in which 44 percent of iPad buyers said they viewed the device as a notebook replacement. Another 41 percent of people in that survey said they would not buy an iPod touch as a result of their purchase, and 27 percent said they would not buy a desktop PC.
Huberty of late has been bullish on AAPL stock, and expects it to potentially hit $400 in 2011, in a best-case scenario. She also sees Apple reaching 100 million active iPhone subscribers by the end of 2011.
Analyst Katy Huberty with Morgan Stanley revealed in a note to investors this week that her firm has assumed that the iPad has "cannibalized" 25 percent of PC notebook sales since its introduction in April. The analyst referenced a claim made this week by the chief executive of electronics retailer Best Buy, who said that the iPad has reduced some notebook sales by as much as 50 percent.
The data from Morgan Stanley Research, based partly on NPD sales figures, shows that notebook sales were up 35 percent year over year in February, but by August they had decreased to a loss of 4 percent from a year prior.
The Wall Street firm has adjusted its projected notebook and tablet sales for the next year accordingly. Huberty now expects PC unit growth to increase 13 percent in calendar year 2010, down from the 15 percent she previously expected. In addition, she sees another 8 percent growth in 2011, decreased from the previous prediction of 13 percent.
Huberty now expects to see a total of 50 million tablets sold in calendar year 2011. That's up from her previous forecast of 37 million.
"We expect tablets to continue to pressure PCs as more vendors launch products (e.g. Dell Streak and Samsung Tab) and Apple expands its iPad distribution (e.g., China and five Latin American countries by September 17)," she wrote.
The figures support findings from a survey released earlier this year by Morgan Stanley, in which 44 percent of iPad buyers said they viewed the device as a notebook replacement. Another 41 percent of people in that survey said they would not buy an iPod touch as a result of their purchase, and 27 percent said they would not buy a desktop PC.
Huberty of late has been bullish on AAPL stock, and expects it to potentially hit $400 in 2011, in a best-case scenario. She also sees Apple reaching 100 million active iPhone subscribers by the end of 2011.
Comments
The numbers could just be falling because the economy isn't great.
It?s still just a theory at this point with only circumstantial evidence, but the economy has been ?bad" for years now.
iPad has eaten into not cannibalized NetBook sales!
This article, like the other one about Best Buy, is about notebook, not netbook sales.
The numbers could just be falling because the economy isn't great.
Possibly, but for the first time in many years I'm considering a desktop as my next computer. I've been choosing a laptop as a compromise between power and portability; but if the iPad can do 95%of what I need the portability for, then I could get a much more powerful iMac for the same price as a MBP.
And I'd only get the iMac for photo and video processing (as a hobby). I'm guessing many people would consider an iPad sufficient to put off replacing a computer or decide to not make the switch to a laptop. Just keep their desktop and get an iPad for on-the-go email and web. Either choice would erode laptop sales.
It?s still just a theory at this point with only circumstantial evidence, but the economy has been ?bad" for years now.
Well, this is exactly what should be expected, that notebook (and netbook, which are not discussed in the article) sales will decline as a result of the introduction of tablets. Despite the cries that you can't do this or that on a tablet, for most consumers, a tablet is a more than adequate notebook replacement. Expect next that sales numbers show an uptick in desktop sales, although this may lag a bit.
iPad has eaten into not cannibalized NetBook sales!
I wish these analysts and bloggers would stop assigning new definitions to established words when a perfectly appropriate word is available. It's hard enough trying to communicate clearly without muddling up word meanings.
Aside from 'eaten into' the appropriate word is 'displaced'
Well, this is exactly what should be expected, that notebook (and netbook, which are not discussed in the article) sales will decline as a result of the introduction of tablets. Despite the cries that you can't do this or that on a tablet, for most consumers, a tablet is a more than adequate notebook replacement. Expect next that sales numbers show an uptick in desktop sales, although this may lag a bit.
It?s what I would expect too, as well as an eventual surge in desktop sales as people find that a proper desktop combined with a very portable satellite computing device is a more useful combination than simply having ?a? notebook. But I still conclude that it?s still a hypothesis until we get more data points.
Possibly, but for the first time in many years I'm considering a desktop as my next computer. I've been choosing a laptop as a compromise between power and portability; but if the iPad can do 95%of what I need the portability for, then I could get a much more powerful iMac for the same price as a MBP.
I think, for the most part, people don't usually make purchasing decisions of computing devices on whether a particular device can do almost everything they need.
Notebooks are great for college students who often go to various places to study and likely have limited desk space where they live, be it dorm of sharing an apartment.
Desktops are perfect for workplace and home offices because they are more ergonomic and easier on the eyes, as well as offer better performance.
iPads are great for couch computing and sales presentations.
If you need portability and compact size, a desktop won't fit the bill. If you need a large monitor and maximum power, a notebook won't do. And if you need a complete filesystem based computer, an iPad can't cut it.
I personally wouldn't choose one over the other based on the overlap in features. They all email, they all surf the web. It is the things that they don't have in common that should be the differentiators in the purchasing decision.
There is no genre. There is the iPad. No one is talking about the need for a Windows powered tablet anymore. Everyone is talking about the presently to arrive Android clones, which mimic the iPad in its every particular (plus, also as predicted, assorted "specs and features" that will presumably "blow away" the iPad).
But this is fundamentally an Apple phenomena, and talking about predicted "tablet sales" as a growth industry manages to once again erase immediate history, wherein everything before the iPad was a miserable failure, the iPad's introduction was dismissed by a lot of people as "just a big iPod" with a ludicrously big bezel incapable of doing "real work", and everything with any chance of success, post iPad, is going to copy the iPad model of lightweight OS coupled to app stores and services.
Since this all happened in the space of less than a year, we might occasionally pause and consider the fact that Android clones aren't simply going to make the obvious and inevitable design that everyone knows is the logical next step, even though we all know that certain parties will never tire of reminding us that Apple never invents anything that they had some fucking piece of shit touch thing years ago that was great. Apple (again) simply changed everyone's idea about how this "category" should look and how it should function and what it should be for.
It?s what I would expect too, as well as an eventual surge in desktop sales as people find that a proper desktop combined with a very portable satellite computing device is a more useful combination than simply having ?a? notebook. But I still conclude that it?s still a hypothesis until we get more data points.
I also believe the smartphone market has cut into sales. Many users today have rather modest needs. For many users if they can browse the net, get on social networks, respond to emails and text message they are all set.
With the iPhone and Android phones selling like crazy that has to cut into the notebook market. Windows most likely being hit harder then Mac.
As predicted, we've gone from the iPad being simply the wrong kind of device (too limited, toy OS, "just for media consumption") to "tablet" magically having become a product category, as if the iPad just happened to be a successful example of the genre.
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All Of This Has Happened Before And Will Happen Again
Possibly, but for the first time in many years I'm considering a desktop as my next computer. I've been choosing a laptop as a compromise between power and portability; but if the iPad can do 95%of what I need the portability for, then I could get a much more powerful iMac for the same price as a MBP.
And I'd only get the iMac for photo and video processing (as a hobby). I'm guessing many people would consider an iPad sufficient to put off replacing a computer or decide to not make the switch to a laptop. Just keep their desktop and get an iPad for on-the-go email and web. Either choice would erode laptop sales.
This is what I did too. Got an ipad for mobile needs and a 27" intel i7 iMac. Sold my old vista laptop and one windows quad core PC. I still have one windows machine (quad core) that I will replace by a Mac at some point in the future. I am going from an all out windows house to an all out mac house just because I bough an iphone which made me go to an AppleStore at some point.
I still need winXP to do remote connects for my job by I an using the free software VirtualBox for it and it works fine. All you need is the winXP CD and youre all set.
for most consumers, a tablet is a more than adequate notebook replacement.
But not if a computer is required in order to use the tablet. For those sorts of devices, the tablet cannot replace the computer, but is capable only of supplementing it.
Possibly, but for the first time in many years I'm considering a desktop as my next computer. I've been choosing a laptop as a compromise between power and portability; but if the iPad can do 95%of what I need the portability for, then I could get a much more powerful iMac for the same price as a MBP.
And I'd only get the iMac for photo and video processing (as a hobby). I'm guessing many people would consider an iPad sufficient to put off replacing a computer or decide to not make the switch to a laptop. Just keep their desktop and get an iPad for on-the-go email and web. Either choice would erode laptop sales.
I'm in a similar train of thought. In 2002 I bought an iBook and thought I would never had another desktop computer. This summer, I picked up the new Mac mini to replace my aging MacBook.
I will buy the next generation iPad and donate my MacBook to charity. My MacBook has left the house a half dozen times since the App Store went online; my iPod touch is good enough for maybe 80% of the things I need to do on the road. With the iPad, that should be closer to 95%.
I can understand that people might opt for an iPad to complement a desktop over a laptop/netbook but people aren't walking into stores with the intention of buying a laptop and walking out with an iPad. Most laptop buyers don't buy them as accessories to desktops but as desktop replacements and you need either a laptop or desktop to even use an iPad. I would suggest the laptop market is starting to hit saturation given that they've been outselling desktops by 4:1 for a while now. Also, bear in mind this graph shows growth not sales so the number of laptops sold might still be going up, it's just decelerating.
I?d think most are making that decision before they hit the stores. Weighing the pros and cons of what kind of device they really want for their next purchase so i can see people holding off on buying a new ?PC? in order to get an iPad. In fact, I know several people who have done just just that and others who will be moving to a desktop for their device because of the iPad.
I also believe the smartphone market has cut into sales. Many users today have rather modest needs. For many users if they can browse the net, get on social networks, respond to emails and text message they are all set.
With the iPhone and Android phones selling like crazy that has to cut into the notebook market. Windows most likely being hit harder then Mac.
That?s an interesting PoV and one that I agree with now that you mention it. I think you could definitely make an argument that the ?PC? growth rate to drop for the last few years was more a result of an upsurge in modern smartphone sales than from the downturn of the economy.
The iPad, in many ways, is just a more capable version of the iPhone and Touch many enjoy using while watching TV on the couch. I would think that the iPad would have a considerably more profound impact on ?PC? sales because of it?s closer association to ?PC?s than smartphones, and the fact that smartphones are often had a much cheaper upfront cost due to subsidization.
The numbers could just be falling because the economy isn't great.
Really? Then why do Apple's notebook sales keep rising? (And considering the fact that they are much more expensive at that).