Will the iPad kill netbooks? Not in this lifetime

Reports of the death of netbooks at the hands of the iPad are not merely premature and exaggerated --- they're flat-out wrong. Netbook sales will continue to dwarf those of the iPad, with an estimated 60 million netbooks to be sold annually by 2013.

Wall Street analyst Katy Huberty of Morgan Stanley claims that iPad sales are gobbling up netbook sales. As evidence, she says that the growth of netbook sales slowed after last summer. The Fortune Apple 2.0 blog says this about netbook sales, based on Huberty's information:

...sales growth of these low-cost, low-powered computing devices peaked last summer at an astonishing 641% year-over-year growth rate. It fell off a cliff in January and shrank again in April --- collateral damage, according to Huberty, from the January introduction and April launch of the iPad.

It makes for a nice story, if only it were true. But it's not. First off, IDC is forecasting substantial growth in what it calls the mininotebook market, essentially netbooks. It says that there will be 45.6 million of them sold in 2011 and 60.3 million in 2013. That doesn't sound like the death of a product category to me.

In addition, Stephen Baker, analyst with the NPD Group, doesn't see the iPad killing netbooks. He points out that the rate of growth of netbooks is slowing, but total unit sales are still way up. Here's what he told Computerworld:

"Certainly the growth rate is coming down. But that's logical. In 2009, netbook sales were a growth story against nothing (in the year before). So it's really a matter of where we are in the development of the product. I'd say it's very difficult at this stage to attribute declining growth of netbooks to the iPad."

In addition, he says that some of the decline in growth is due not to the iPad, but to low-cost, fully featured notebooks which run Windows. Here's what Computerworld says:

Rather than credit the iPad for the cooling of netbook sales, Baker gave a nod to slightly-more expensive notebooks running Windows. The sub-$500 notebook category now outsells netbooks.

"The development of the under-$500 notebook market is the biggest story of 2009 and early 2010," said Baker. "For a little more money, sometimes just $50 or so, consumers can buy a full notebook with a full-sized keyboard, a 15-in., sometimes a 17.-in. screen, with higher resolution [than a netbook]. That's how the notebook makers have kept things from dropping into the very bottom of the market."

So the iPad may be popular, but its sales will continue to be dwarfed by netbooks and under-$500 Windows notebooks.

Related Opinion

Mike Elgan: Netbooks? Ha! iPads will replace desktop PCs

See also Computerworld's Complete iPad Coverage

Copyright © 2010 IDG Communications, Inc.

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