A new report by Morgan Stanley suggests that the Apple iPad has "cannibalized" netbook sales... and started doing so before it even went on sale. Though this is the outcome predicted by Steve Jobs - who claimed that netbooks "aren't better than anything
" - the report also shows that the iPad may also negatively impact notebook and desktop sales as well.
Analyst Katy Huberty of Morgan Stanley released a report to her clients on Thursday
looking into the potential impact of HP's acquisition of Palm. What drew the most attention, though, was her assertion that the iPad was eating into the US market for netbooks, though notebooks and desktop computers, as well as handheld game devices were also "candidates for cannabilization." According to data in the report from a survey done by Morgan Stanley and Alphawise, netbook growth dropped precipitously from record highs in July 2009, when growth was clocked at a staggering 641% compared to July 2008. The rate of growth slowed dramatically to 68% in January from 179% in December 2009, and kept falling sharply. By April of this year, netbook sales were just 5% more than they were the same month a year ago.
Pundits began picking the report apart almost immediately. Many pointed out that 5% growth is still growth, and that the rate of sales increases was bound to decline after such red-hot growth as was experienced last year, and as most of the people who wanted a netbook already had one. Others made the simple point that sales always tend to slow after the Christmas season, and that the decline started before Apple even acknowledged that there was such a thing as an iPad (though many of us remember the hype that proceeded the official announcement). In the survey, moreover, she mixed notebooks and netbooks into the same category.
What the report seemed to show more clearly is that the iPad may really cut into notebook sales, with 44 percent saying they would buy an iPad over a notebook. 24 percent would not buy a MacBook, while 20 percent would not purchase a PC notebook. Even more interesting is that 27 percent of iPad users would use the tablet instead of a desktop, with 14 percent saying they had decided not to buy a Mac desktop they had been considering, and the other 13 percent saying they'd used the iPad instead of a PC.
There are a number of people out there - my mom is one of them - who have no need for a general-purpose computer. They read their email and browse the net. Maybe they play games, watch videos or read books. They don't need the complexity of a "real" computer, and for them, an unjailbroken iPad is probably just about perfect. So the report may be premature, and possibly a little misleading, but it's hard to say it's all wrong.