44% of iPad buyers view Apple's tablet as notebook replacement
A survey of iPad buyers found that 44 percent would purchase the touchscreen device instead of a notebook, and 41 percent would not buy an iPod touch as a result of their tablet.
The March 2010 Alphawise survey results, disclosed Thursday by analyst Katy Huberty with Morgan Stanley, give insight into the potential cannibalization of other Apple products due to the release of the iPad. The study found that of the 44 percent who would not buy a notebook, 24 percent would not buy a MacBook, while the other 20 percent would not purchase a PC.
The survey also found that 27 percent of users would not buy a desktop as a result of their iPad purchase, with 14 percent of those not buying a Mac desktop, and the other 13 percent passing on a PC. The survey also found that the iPad will affect e-reader and handheld videogame sales, two segments in which Apple does not have a dedicated device.
Huberty said that the iPad has already had an impact on portable computer sales, which have slowed since the start of 2010. The results suggest that the netbook market was most impacted by Apple's iPad.
"U.S. consumer PC, and especially notebook, growth decelerated in January when Apple introduced the iPad and again in April when the iPad launched," she wrote. "Given the corresponding increase in (average selling prices) in the market, we believe much of the demand shortfall came from netbooks and low-cost notebooks."
The data was included as part of a note on HP's acquisition of Palm for $1.2 billion. HP has already suggested that Palm's WebOS could extend to platforms beyond smartphones, and be ported to tablets and netbooks to compete in the mobile space with Apple's iPad.
"HP's acquisition of a mobile operating system is supportive of our view that mobile Internet devices, and tablets in particular, may prove a headwind to notebook growth," Huberty wrote.
Her "bull case assumptions" suggest the global tablet market could grow to 60 million units in 2013, which is nearly double the current netbook numbers. She expects Apple's iPhone OS and Google's Android mobile operating system to be the market leaders in the tablet space, but said WebOS could capture a 15 percent market share by then.
The projection also calls for 35.6 percent gross margin for HP's WebOS tablets, which would be better than rival HTC's 31.6 percent margins, but well below a projected 2011 gross margin of between 45 percent and 50 percent for Apple and the iPhone and iPad.
Apple's iPad has had a strong start, with recently announced sales of 1 million in the first 28 days, based solely on U.S. sales. That well exceeds most analysts' expectations, most of whom predicted soon after the product's launch that it would sell between 1 million and 5 million in its first year.
During Apple's last quarterly earnings conference call, Tim Cook, the company's chief operating officer, declined to predict how much the iPad would cannibalize sales of other Apple products. He noted that after the iPad was announced in January, there was "nothing obvious" seen in sals of iPods or Macs. He did, however, say that he could see the iPad taking a large portion of the netbook market.
"To me it's a no-brainer: iPad, netbook, it's sort of 100 to zero," Cook said. "I can't think of a single thing the netbook does well, and the iPad does so many things so very well. I'm already personally addicted to mine. I couldn't live without it."
The March 2010 Alphawise survey results, disclosed Thursday by analyst Katy Huberty with Morgan Stanley, give insight into the potential cannibalization of other Apple products due to the release of the iPad. The study found that of the 44 percent who would not buy a notebook, 24 percent would not buy a MacBook, while the other 20 percent would not purchase a PC.
The survey also found that 27 percent of users would not buy a desktop as a result of their iPad purchase, with 14 percent of those not buying a Mac desktop, and the other 13 percent passing on a PC. The survey also found that the iPad will affect e-reader and handheld videogame sales, two segments in which Apple does not have a dedicated device.
Huberty said that the iPad has already had an impact on portable computer sales, which have slowed since the start of 2010. The results suggest that the netbook market was most impacted by Apple's iPad.
"U.S. consumer PC, and especially notebook, growth decelerated in January when Apple introduced the iPad and again in April when the iPad launched," she wrote. "Given the corresponding increase in (average selling prices) in the market, we believe much of the demand shortfall came from netbooks and low-cost notebooks."
The data was included as part of a note on HP's acquisition of Palm for $1.2 billion. HP has already suggested that Palm's WebOS could extend to platforms beyond smartphones, and be ported to tablets and netbooks to compete in the mobile space with Apple's iPad.
"HP's acquisition of a mobile operating system is supportive of our view that mobile Internet devices, and tablets in particular, may prove a headwind to notebook growth," Huberty wrote.
Her "bull case assumptions" suggest the global tablet market could grow to 60 million units in 2013, which is nearly double the current netbook numbers. She expects Apple's iPhone OS and Google's Android mobile operating system to be the market leaders in the tablet space, but said WebOS could capture a 15 percent market share by then.
The projection also calls for 35.6 percent gross margin for HP's WebOS tablets, which would be better than rival HTC's 31.6 percent margins, but well below a projected 2011 gross margin of between 45 percent and 50 percent for Apple and the iPhone and iPad.
Apple's iPad has had a strong start, with recently announced sales of 1 million in the first 28 days, based solely on U.S. sales. That well exceeds most analysts' expectations, most of whom predicted soon after the product's launch that it would sell between 1 million and 5 million in its first year.
During Apple's last quarterly earnings conference call, Tim Cook, the company's chief operating officer, declined to predict how much the iPad would cannibalize sales of other Apple products. He noted that after the iPad was announced in January, there was "nothing obvious" seen in sals of iPods or Macs. He did, however, say that he could see the iPad taking a large portion of the netbook market.
"To me it's a no-brainer: iPad, netbook, it's sort of 100 to zero," Cook said. "I can't think of a single thing the netbook does well, and the iPad does so many things so very well. I'm already personally addicted to mine. I couldn't live without it."
Comments
"To me it's a no-brainer: iPad, netbook, it's sort of 100 to zero," Cook said. "I can't think of a single thing the netbook does well, and the iPad does so many things so very well. I'm already personally addicted to mine. I couldn't live without it."
Hmm... things Netbooks do well that the iPad doesn't:
1. Cost $400 or less.
2. Run the same operating system, office programs, etc that their desktops/work computers do (most of the time without needing to pay for an extra copy)
3. Let you type long reports, write long mails, etc on a physical keyboard without needing to carry around an extra plug-in keyboard
4. Skype (maybe there is support for this now, but not last time I checked)
5. Connect to peripherals everywhere easily and without needing to take special cables from home
6. Access file types currently unavailable on the iPad (flash, FLAC, MKV, i'm sure there are more)
7. Show the screen at an acceptable viewing angle for working without holding it in your hands or propping it up against something.
Those were a few things that came to mind... I know there are tons of things the iPad does better, but comparing them like Cook is is really a situation of Apples and Oranges.
Again, iPad excels at accessing information, but Netbooks and Macbooks will have it beat for content creation for a long time to come...
Any college student I've talked to that owns a netbook constantly complains about it, and talks about how it wasn't worth the cost regardless of the price. They wouldn't take an iPad in place of it, but many of them have said to me: "man, I wish I bought a Mac". For those who want a small netbook just to have something lightweight to browse the internet with in their bag, I do think the iPad is the ideal solution. I still don't plan to buy one, but kids who don't even own/like Apple notebooks are really interested in the iPad around campus.
Cannibalization occurs mainly or is apparent only when their respective markets near saturation. Thus, the market for smaller and larger mobile computing devices therefore may continue in their respective growth phase, side by side. And the time when they each reach their respective decceleration in growth, may not at all be a case of cannibalization but a saturation of their respective markets.
Sure there would be cannibalization but the iPad and related mobile computing devices will co-exist with the desktops, laptops, netbooks and smaller mobile computing devices for a very long time, because each have defind functions, and some have defined demographic targets.
The iPod Touch and the iPad differ in their cost and portability, and more important their actual "function", even if the features seem almost the same. More than likely, the iPod Touch will appeal more to younger people both for its portability and the cost. How can you ever hide playing with the iPad when you get bored with the class or those neverending school activities?
I doubt that the data provided can predict the extent of cannibalization. This is especially true with the netbook data -- the period provided is just too short. The July-September is a back to school period while the next quarter is the holiday period. That sales would dramatically fall during the next two quarters (as seemed to be inferred from the netbook sales) is a normal pattern for many consumer products -- even the historical record of Apple sales would show that, after you exclude the expansion in market.
As to the consumer survey, that is just that, a consumer survey. I doubt very much that it even scratched the potential market of iPad and related mobile computing devices.
The market is still in growth phase for both the iPad Touch, and more so with the iPad and related larger mobile computing devices. As far a netbooks are concerned, it is too soon to predict whether they reach their plateau. Their exponential phase came at a time while the world economy was quite bad.
CGC
Again, iPad excels at accessing information, but Netbooks and Macbooks will have it beat for content creation for a long time to come...
I'm going to go out on a limb here and guess that you don't own one.
I think the thing that surprised me the most is how GOOD it is at content creation. It's true that without a bluetooth keyboard or one of these things typing more than a page or two gets old quick. But typing anything from a blog post to a Slashdot reply is actually really easy, and arranging things in Pages or Keynote is actually MUCH more fluid with direct touch manipulation.
I'd say the iPad is *the* ultimate PowerPoint/Keynote machine--both for creation and presentation-- and I wouldn't be surprised if an entire ecosystem of devices spring up around that use case.
The device has been around for a month. There will be solutions to all your problems over time, but for only having existed for a short time it's pretty amazing how good it is at almost everything.
My guess: it may cannibalize a small fraction of iPod Touch sales, where Touch customers find they can do more with an iPad, but it will rebalance the desktop/notebook market towards the desktop. The iPad buyer gets great portability and may be equally happy with a desktop (which is more price efficient per feature) as their other machine.
I have a feeling it doesn't cannibalize the MacBook market much, if at all. I would put money down that whoever would buy an iPad over a notebook would be buying it over a comparatively priced notebook. If you feel like you need a MacBook, you need a MacBook.
Any college student I've talked to that owns a netbook constantly complains about it, and talks about how it wasn't worth the cost regardless of the price. They wouldn't take an iPad in place of it, but many of them have said to me: "man, I wish I bought a Mac". For those who want a small netbook just to have something lightweight to browse the internet with in their bag, I do think the iPad is the ideal solution. I still don't plan to buy one, but kids who don't even own/like Apple notebooks are really interested in the iPad around campus.
I'm a college student whose 3 year-old Dell is dying. I was planning on buying a MacBook Pro for my last 3 years, but instead bought a 64gb WiFi iPad. Reason: cost difference was $600-$1000, and I love my iPod Touch and knew the iPad with iWork would be better than a laptop for me. Weight, battery life, and books all weighed heavily in my decision as well. I can say without doubt that I made the right decision, especially after the last month of school. Note-taking apps have helped immensely, and the 12-14 hour battery is amazing! I certainly love it, and it did cannibalize the sale of a MacBook Pro. I still love MBPs though. ;-)
P.S. poor students. I do get it that net books are lightweight and small. But your eye laser surgery later in life is certainly not worth that convince.
That's the second thing: the heavy lifting tasks like printing or importing/manipulating documents that the iPad and the current versions of Pages, Numbers, and Keynote just can't handle. Thinking the iPad is a replacement for a computer that can do these kinds of things is a misconception. Like me they probably got caught up in Steve's reality distortion field. Try applying for a job online (filling in an online application and submitting a resume/cover letter): i can't do it with just my iPad.
Of course, there is a chance that the survey is right. If it is then maybe people have been buying powerful computers because that's all they could buy. Now for the first time they are able to buy just enough computer to do the simple every day things an iPad is perfect for. If this is so then once the word gets out about iPad, I'm talking about iPad owners telling neighbors, friends, and family what they are doing then it's the computer companies that have nothing like the iPad on their horizons that should worry.
One last thought: the iPad reminds me of my old MessagePads from the last century. The ipad is a cool tool that Apple got right this time. When the iWork apps get updated so they're more full featured then the big boys will really be in trouble.
The data was included as part of a note on HP's acquisition of Palm for $1.2 billion. HP has already suggested that Palm's WebOS could extend to platforms beyond smartphones, and be ported to tablets and netbooks to compete in the mobile space with Apple's iPad.
"HP's acquisition of a mobile operating system is supportive of our view that mobile Internet devices, and tablets in particular, may prove a headwind to notebook growth," Huberty wrote.
Her "bull case assumptions" suggest the global tablet market could grow to 60 million units in 2013, which is nearly double the current netbook numbers. She expects Apple's iPhone OS and Google's Android mobile operating system to be the market leaders in the tablet space, but said WebOS could capture a 15 percent market share by then.
The projection also calls for 35.6 percent gross margin for HP's WebOS tablets, which would be better than rival HTC's 31.6 percent margins, but well below a projected 2011 gross margin of between 45 percent and 50 percent for Apple and the iPhone and iPad.
Aw come on. These are not even SWAG's. They are plain ole WAG's!
These analysts are in the wrong profession, they should be writing Science Fiction ... Oh wait, they already are.
I'm a college student whose 3 year-old Dell is dying. I was planning on buying a MacBook Pro for my last 3 years, but instead bought a 64gb WiFi iPad. Reason: cost difference was $600-$1000, and I love my iPod Touch and knew the iPad with iWork would be better than a laptop for me. Weight, battery life, and books all weighed heavily in my decision as well. I can say without doubt that I made the right decision, especially after the last month of school. Note-taking apps have helped immensely, and the 12-14 hour battery is amazing! I certainly love it, and it did cannibalize the sale of a MacBook Pro. I still love MBPs though. ;-)
Well that is still pretty awesome it does what you want it to do! I still don't think I will ever feel like I don't need my notebook (it's my music hub, which I feel like I need complete control over at all times), but knowing it's good for note taking, you've seriously piqued my interest in getting one. What major are you? Math and engineering notes aren't worth the hassle on a notebook, but if note taking software exists where you could use something like a stylus that is accurate and neat, I'd be really interested.
I am growing old probably. I just do not understand how an iPan can replace a fully featured pc with a full OS? How an iPan can replace an iPod (they talk of iPod touch so probably those people are now looking in classic/nano direction)?
P.S. poor students. I do get it that net books are lightweight and small. But your eye laser surgery later in life is certainly not worth that convince.
They don't!. A good analogy would be a person who owns a car, a bike and still ride the public transport, once in a while, as modes of transportation -- each has its function or optimal use. However, the luxury to have all these is only for those who can afford all these modes of transportation..
On the other hand, a person who has a family of four to support, but works in odd jobs that sometimes do not even pay the minimum wage may not likely have the luxury to have a car and a bike. There are in this group in our society who have to spend hours to commute to work, do groceries, etc. because their only recourse is public transportation, which is really not very reliable and frequent in many part of the United States, for example.
The same is true with computers, some buy netbooks, no matter how reliable computers like Apple's line of products may be, because that is all the can afford right now. In fact, many could not even afford a netbook.
That is also the case with the iPad, and related devices. It is not a all around computing device, but for many people, it may suffice for the computing needs because that is all they can afford. They have to work around its limitations (and this is doable, e.g., reliance on servers in universities, for students).
For others, especially those who can afford, the iPad and othe related Tablets may be for convenience, e.g., "light travel" and still have most of your day-to-day needs for computing without ;iugging your "bulky computer with all the files and applications you need.
Go back to the analogy of the car, bike and public transportation, and you should get the point.
CGC
Since buying my iPad, use of my iPhone and iMac has dropped off dramatically and I now use iPad 90% of the time. The iPhone is just a phone to me now and I haven't used an app or the data network since getting the iPad. My iMac gets turned on to sync my iDevices and occasionally surf the web but that's it. If it was possible to use iPad as my main/only computer, I'd do it in a heartbeat.
The iPad 3Gs will save me about $1,000. I was planning to buy an MBA to replace my aging original intel MacBook.
In addition, I'm undecided whether to upgrade my 3Gs iPhone with ATT for the 4g iPhone. I guess I will make that decision after using the iPad for a few months while contract with ATT runs out.
I may just get a 'dumb' Verizon/T-mobile phone that sync's contacts with my iMac's Address Book. Or even Walmart's Boost for $40/mo!
Anyone know of a model that is not a blackberry that sync's contacts with Apple's Address Book?
That's the second thing: the heavy lifting tasks like printing or importing/manipulating documents that the iPad and the current versions of Pages, Numbers, and Keynote just can't handle. Thinking the iPad is a replacement for a computer that can do these kinds of things is a misconception. Like me they probably got caught up in Steve's reality distortion field. Try applying for a job online (filling in an online application and submitting a resume/cover letter): i can't do it with just my iPad.
Of course, there is a chance that the survey is right. If it is then maybe people have been buying powerful computers because that's all they could buy. Now for the first time they are able to buy just enough computer to do the simple every day things an iPad is perfect for. If this is so then once the word gets out about iPad, I'm talking about iPad owners telling neighbors, friends, and family what they are doing then it's the computer companies that have nothing like the iPad on their horizons that should worry.
One last thought: the iPad reminds me of my old MessagePads from the last century. The ipad is a cool tool that Apple got right this time. When the iWork apps get updated so they're more full featured then the big boys will really be in trouble.
Yes, not everyone uses computers the same way and need the same functionality. I would argue the vast majority of people will get by just fine with iPad and rarely ever run into something they can't do. This will be especially true once the product matures a bit. But still even today, I'm using my iPad almost exclusively. My iMac sits barely ever turned on for a month. That seems like a replacement to me.