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Analysts dispute talk of iPad's impact on PC sales

Too early to say Apple's tablet 'putting the hurt' on notebook sales

September 17, 2010 04:08 PM ET

Computerworld - The death of the PC industry at the hands of Apple's iPad has been greatly exaggerated, analysts said today.

While it's true that the iPad has cannibalized sales of PC notebooks, the trend is nowhere near the 50% or so that Best Buy's CEO Brian Dunn noted in an interview with the Wall Street Journal, said Stephen Baker, a retail analyst with the NPD Group.

"Clearly, the iPad is a great product, but it's way too early to say that it's putting a significant hurt on the PC market," said Baker today. "In the future, in 2011, assuming that other tablets appear and the trend [in tablets] continues, cannibalization is likely."

Best Buy's CEO told the Wall Street Journal that internal company estimates had pegged the iPad as the cause for a downturn in PC notebook sales. Bloggers immediately seized on Dunn's remark.

Baker said that didn't wash.

"Just because one thing is happening doesn't mean another is causing it," he said, cautioning against jumping to the conclusion that the iPad was responsible for all the lost notebook sales that Dunn reported.

There are a host of other, more likely factors, Baker said, including a wealth of consumer electronics, including 3D televisions, new digital cameras and game consoles, that weren't available or as popular last year at this time. And while PCs were the consumer electronics choice in 2009, this year other options compete for dollars.

In a survey that NPD has conducted but not yet released, the firm has pegged iPad cannibalization of PC sales "in the mid-teens," Barker said.

"For the most part, [in the iPad] you're seeing a product that's an early-adopter product, has pricing at or above what a notebook costs, with a volume clearly not enough yet to worry PC makers," Baker added.

Other Wall Street analysts used NPD data -- which noted that U.S. notebook retail sales were down 4% in August compared to the same month last year -- to estimate that the iPad has chewed up about 25% of PC notebook sales since the tablet's April introduction.

Baker disputed that conclusion, too.

Notebook sales seem down -- about 2% when both July and August are combined -- not because of the iPad but instead because they're being compared to extraordinary numbers posted in the same months of 2009.

In other words, last year's robust sales will be nearly impossible to match.

"At some point, the gravy train [of PC sales] has to wind down," Baker said.

Other factors in play this year range from initial sales of Windows 7 tailing off -- "We're at the end of the Windows 7 bubble," said Baker -- to much less aggressive pricing by retailers for back-to-school sales, a period that traditionally sparks significant PC sales, especially of laptops.

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