iPad Killing Netbooks, Eating Into Laptop Sales

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ipadloveADOTAS – As the world swooned with the release of the iPad, I was surprised to find myself in the “Meh” crowd. The week before I’d received my first iPhone and was still pretty fascinated by it (now I just scream at it a lot, like every other piece of technology I own); the iPad looked like a giant-sized version that you couldn’t use as a phone or take pictures with.

More screen real estate? Big whoop — the iPhone fits in my pocket and the palm of my hand. I decided I’d skip on this toy.

Then my mom got one.

I was visiting her last week, introducing my girlfriend from Milan, and she said, “Gavin, I have a surprise!” She pulled out a giant box, lifted the cover and an iPad with the plastic still on the touchscreen stared at me — and I found myself staring back with wide eyes.

“I wasn’t going to buy it, but then I started playing with it,” she said, handing the vaunted device to me; my hands trembled a bit as I’d seen people use iPads but never put my own greasy mitts on one. “The guy at the store set me up with some stuff — it’s so neat!”

I had trouble putting it down — I immediately downloaded more free apps and was blown away by the difference between iPad and iPhone apps. The touchscreen was ridiculously friendly to the touch, and I had no problem holding it as I watched videos. This was not a plus-sized iPhone; this was something different entirely.

The girlfriend, an iPhone fanatic herself, was immediately enamored; she couldn’t let it rest to eat breakfast.

“I must have one,” she whispered in my ear. Something tells me I should start saving now for her Christmas present — though I may wait for the second gen, supposedly arriving in early 2011.

After having the full iPad experience, I can’t say I’m shocked to hear netbook sales have stopped growing and are now on the decline. Morgan Stanley analyst Katy Huberty reported that after peaking at the end of 2009, sales growth began drastically slipping after the launch of the iPad until August, when sales growth charted at -4% year over year. Early data from September suggests it’s going to stay that way.

“Tablet cannibalization” is a factor in the decline, Huberty notes, but TechCrunch says what everyone else is thinking: netbooks suck. The idea of the netbook was a cheap and easy device to get you on the Internet; well, the iPad is relatively cheap and functions a helluva lot better than those ugly devices.

But netbooks apparently aren’t the only victims of iPad cannibalization: Best Buy CEO Brian Dun told The Wall Street Journal that iPad is stealing 50% of the retailer’s laptop sales. Huberty is on the same page, summarizing her analysis: “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.”

We doubted, but Apple CEO Steve Jobs could be right that the tablet is the way of the future. But the iPad itself will soon have true competition in the form of the Samsung Galaxy tablet, which is smaller, uses Google’s Android OS and will be carried on the big four U.S. wireless carriers, not just AT&T. However, Samsung hasn’t released a price tag, and speculation is running from $200 to more than $1,000….

6 COMMENTS

  1. Mr. Dunaway, it appears as though you are incapable of taking even a little criticism about your writing. I’ve just noticed that very rarely do any of your stories even remotely connect to the subject of your pieces. Save it for your personal blog. My mistake for wanting to check out Adotas as an industry source and not the personal diary of a 12-year old boy.

  2. I enjoyed the article. I was amused that a “critic” who had no experience with the iPad lost his cookies when he finally saw and touched one. How honest.

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