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Analysis: Has the iPad killed the netbook?

Can netbooks survive and thrive in the coming years?

For months we've been hearing that tablet PCs - led by Apple's iPad - are hurting netbook sales in a big way. But are they really? For now, touchscreen tablets appear to be luring consumers away from netbooks but analysts believe in the long term, netbooks will hold their own in an increasingly fragmented mobile device market, particularly as computer makers address user complaints by enhancing netbooks with faster processors and new capabilities.

For months we've been hearing that tablet PCs - led by Apple's iPad - are hurting netbook sales in a big way. But are they really? It depends on whom you ask. For now, touchscreen tablets do appear to be luring consumers away from netbooks.

In the long term, however, netbooks will likely hold their own in an increasingly fragmented mobile device market, particularly as computer makers address user complaints by enhancing netbooks with faster processors and new capabilities.

Dueling data

Tech industry analysts can't seem to agree on whether tablets are harming netbook sales. Changewave surveyed more than 3,100 consumers and found that only 14 percent of those who planned to purchase a laptop within 90 days would get a netbook - a significant drop from 18 percent at the start of 2010, and 24 percent in June 2009.

But ABI Research says the netbook market will not be "gravely injured" by the iPad and similar tablets, including the Samsung Galaxy Tab and Research In Motion's BlackBerry PlayBook. "This is a rumour perpetuated by Apple fanatics," ABI Research mobile device analyst Jeff Orr said.

Orr points out that annual netbook shipments continue to grow, and that the top isn't in sight. Specifically, about 36 million netbooks shipped worldwide in 2009, and an estimated 43 million will ship in 2010. The netbook is the first ultramobile device to reach 'mass-market appeal', which Orr defines as a product that ships 40 to 50 million units annually. He acknowledges, however, that netbook sales are slowing, and says that today's shipments don't match the "meteoric growth" of the past two years.

Blame the iPad?

Netbook shipments in the US fell 34 percent from the third quarter of 2009 to the same period in 2010, according to research firm Gartner. The likely culprit? A certain tablet from Apple comes to mind.

"Yes, there was some displacement of mini-laptops by the iPad in the US, but determining how much is not an exact science," said Gartner client computing research director Angela McIntyre. She estimates that Apple's bestselling tablet 'displaced' 10 to 20 percent of netbook shipments in the US in the third quarter of 2010, which suggests that a sizable number of consumers chose the iPad over a netbook. Consumers appear not to be as enamoured of netbooks as they once were. But tablets aren't the sole cause.

In fact, netbooks weren't the only computer devices to suffer from sluggish back-to-school sales in the third quarter of 2010. "Many factors contribute to this, such as the down economy, few new compelling PCs on the market, and a wait-and-see attitude about new PCs and media tablets coming to market next year," said McIntyre.

NEXT PAGE: Twice the price

See also: can Google Chrome OS save the netbook?

  1. Can netbooks survive?
  2. Twice the price
  3. Acer's take


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