The iPad appears to be making significant inroads into the netbook market, based on research findings and the conclusions of a Morgan Stanley analyst, but other analysts aren't so quick to agree.
Netbook sales Best Fit CRM Analysis - Learn which 3 CRM solutions would best fit your business. Click here. are no longer growing at the double-digit rates of the last few years, noted Morgan Stanley analyst Katy Huberty, who made the observation in a client note primarily focused on HP's (NYSE: HPQ) acquisition of Palm (Nasdaq: PALM).
Netbooks posted just a 5 percent year-over-year sales increase last month, Huberty reportedly wrote in the note. That compares dismally with the 600 percent jump they saw in July 2009 and the 800 percent jump in March 2009.
January 2010 was the tipping point, she said, based on data from Morgan Stanley and NPD, which reported that year-over-year netbook growth was 53 percent in February, but only 25 percent in March. In April, it dropped to 5 percent.
Those two monthly declines correlate with Apple (Nasdaq: AAPL) CEO Steve Jobs' announcement of the iPad in January and its subsequent unveiling in April, Huberty observed.
Also bolstering her case is a Morgan Stanley/Alphawise survey conducted in March. That survey found that 44 percent of U.S. consumers who planned to buy an iPad claimed to be buying it instead of a netbook or laptop.
Morgan Stanley did not return MacNewsWorld's call in time for publication.
With the iPad on the market for just a month, it is difficult to draw the conclusion that its sales are having a direct impact on netbook sales, Steven Baker, VP of industry analysis for NPD, told MacNewsWorld.
Netbook sales growth is slowing, he acknowledged, but there are other, unrelated reasons for that decline.
Furthermore, the rate of decline is in question, said Baker. There were virtually no sales in 2008 due to the recession, and the fact that the netbook market was barely emerging in 2008 makes comparisons with 2009 figures deceptive.
The drop in sales growth is not unexpected, he argued, because the netbook market is naturally entering a lower-growth part of its cycle. "Sales would have leveled off even if the iPad never entered the market."
All that said, the iPad eventually will begin to erode netbooks' market share, if only because the two devices are natural competitors, Baker predicted.
Not Now, but Later?
The extent to which that will happen is still subject to much debate, Bob O'Donnell, an analyst with IDC, told MacNewsWorld.
"Certainly, there will be some people who decide on the iPad instead of the mini or netbook, but we don't think these devices are mutually exclusive. There will be some people who will own multiple devices."
Morgan Stanley's notion that the iPad has already made a dent in netbook sales is far-fetched, said O'Donnell.
"The netbook market started to slow down in terms of growth even before the iPad was ever announced," he pointed out.
This year there will be 39 million netbook units sold, according to IDC projections, he said. There were 34 million sold in 2009 and 11 million in 2008.
These projections only account for U.S. growth, he added. "We are going to see a huge growth in netbook sales in emerging markets -- huge."
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