Apple [AAPL] is on its way to becoming the world's dominant computer platform. That's because iPad sales are booming while Mac sales are growing at a rate that's far above the industry average. My back-of-the-envelope calculation suggests the company will grab at least 20 percent of global PC sales this year, if you include tablets.
Apple was once on life support. Today it is arguably the world's dominant PC manufacturer in terms of sales of current systems.
When a pad is a PC
Crux of this argument is the iPad's place as a PC. Some say the iPad isn't a PC. I disagree. As operating systems move into the cloud, we won't require a PC (or Mac) to sync our tablets to -- we'll just sync wirelessly to our cloud-hosted MobileMe directories.
Some argue the iPad isn't a productivity tool. They're wrong. Growing use of virtual private networks, remote virtualization tools, cloud-based Apps is one reason they are wrong. iPad/tablet advantages include battery life and portability. These things are even in the army.
Above you'll see the world's first news report shot and edited entirely using an iPad 2 for broadcast. The story is trivial, but it underlines what I meant when I remarked that in future we'll regularly create and consume news content made on iPads and other tablets. The post-PC revolution will be televized. By you, or people like you.
I see plenty of evidence to help prove the iPad is a PC. Of the major analysts Canalys agrees with me while IDC and Gartner don't. You make your own decision -- if you agree with me, here's why Apple will be the world's dominant platform this year.
Changewave data released last week indicates 27 percent of US consumers will purchase a tablet in future, with 82 percent of those who will purchase one in the short term saying they'll choose an iPad 2.
Huge demand, meet short supply
Apple is already sold out of its first tranche of iPad 2 units in the US, with estimates claiming up to one million of the things may have sold in just three days. International sales may be delayed or constrained while Apple attempts to shore up production.
Sales of tablet PCs will reach 60 million this year -- and Apple will account for the vast majority of these, according to DisplaySearch.
"Tablet PCs are the fastest growing application for touch screens," noted Jennifer Colegrove. The analyst expects Apple to dominate this year and next, but that in 2016 it will control just under half the market -- though this will still be equivalent to 100 million tablet sales that year.
This year, DisplaySearch predicts Apple will sell at least 40 million iPads this year.
So we have huge demand.
[ABOVE: David Letterman's top ten reasons to get an iPad 2 include that hes "addicted" to the thing.]
Combining DisplaySearch figures with Canalys analysis suggests we'll see 20 million fewer than we might once have anticipated netbook or notebook sales this year.
Canalys' latest worldwide PC market forecast (which includes iPad sales) suggests year-on-year growth of 14 percent for 2011 -- much of this from "pad" shipments, which will increase to 52 million units worldwide in 2011.
"Of these shipments, Apple is expected to account for over 75 percent, leaving approximately 12 million units for other vendors," the analysts said.
That's broadly in line with analysis from IDC, who recently suggested Apples share of the tablet marker slipped to 73 percent in the December quarter, down from 93 percent in the September quarter. IDC believes that about 50 million tablets will ship this year.
"Pads are disrupting the PC refresh cycle in highly penetrated markets," said Canalys Analyst Tim Coulling in a statement. "Their innovative user experience has captured the imagination of consumers, who are extending the life of their existing hardware, while taking an interest in pads."
And this is also happening in the enterprise: "The number of affluent, highly-mobile executives buying pads will increase quickly in 2011," said Principal Analyst Daryl Chiam. "Likewise, vertical market adoption of pads, especially in healthcare and education, will gain momentum, as more appropriate applications are built."
The iPad has eaten the netbook market, expected to decline by about 13 percent this year. Notebook sales are expected to climb 8 percent this year, despite the iPad effect, Canalys said.
So what can we deduce from all this analysis?
Lies and statistics
First, Apple should take approximately 75 percent of tablet sales this year. Canalys suggests this equates to 40 million iPad sales.
Gartner recently slashed its market growth forecast for the PC industry, on strength of the Apple tablet, from 15.9 percent to 10.5.
Mac sales have exceeded industry growth for 19 consecutive quarters, but given the increasing economic instability and the impact of cutbacks on consumer markets worldwide, lets assume Apple's Mac sales remain flat, in line with those of FY 2010
Apple sold 13.66 million Macs in FY 2010 (from the company's published financial statements). If we estimate FY 2011's Mac sales as just the same, and add these to the total iPad sales estimates above, that equates to 53.66 million estimated Mac and iPad sales this year.
Canalys estimates total PC and tablet sales of 296,252,520 units this year. Compare this with my 53.66 million estimated Mac and iPad sales and you'll see that Apple will account for approximately 20 percent of the entire combined PC and tablet market this year.
A few givens:
- Given that Dell, Acer and HP have no viable currently shipping tablet product to compete with Apple.
- Given Apple's de facto control over the tablet component supply chain.
- Given that Apple's tablet is already shipping and has proved itself in the market with its powerful OS, it has to be considered extremely unlikely competitors will really kick back on tablets this year. Forrester think they'll fail.
What does this mean?
The evidence and analysis means I'm predicting Apple's combined Mac and iPad marketshare for 2011 will propel it into the world's top three PC makers, potentially in second place above Acer, and -- conceivably -- threatening market leader, HP.
HP is clearly seeing this emerging threat. That is why it acquired Palm for the webOS, and why its CEO has a future strategy involving mobile devices and cloud-based computing.
With this in mind, it is strange analysts this morning began downgrading Apple stock on strength of a "deceleration" in manufacturing at Apple partner, Foxconn.
This could reflect slowing iPhone sales as the market prepares for iPhone 5 -- this itself likely reflects some consumer suspicion of the device on strength of previous reports on antenna issues.
It could also reflect non-Apple business (not that the analysts reflect on this, seemingly). Foxconn also makes machines for other manufacturers -- all of which have been impacted by the global economic slump and the iPad effect.
Add a little Lion magic to the iPad magic and iPhone/iPod/iPad halo boosting Mac market rebound, and you could see Apple's fortunes march forward even further.
Lion will undoubtedly boost Mac sales as enthusiastic iPad owners choose to upgrade their Windows machines to Apple's platform. This is a trend which has maintained itself for 19 consecutive quarters. There's no good reason to see it end just yet.
What do you think? Is the iPad a PC? If it is, should Apple be considered the world's big PC name? Let me know in comments below. I'd also very much like to invite you to follow me on Twitter so I can let you know when I post new reports here first on Computerworld.