Is the iPad a Notebook Killer?

notebook sales

New statistics from Morgan Stanley Research seem pretty damning for the notebook industry. After months of decline, the unit sales growth rate per month dipped into the negative in August. Is this a statistical blip, or is the iPad really hitting laptop sales?

Morgan Stanley's reasoning: "tablet cannibalization." Since the Apple iPad is pretty much the only device in this class that's on the market, the implication is that its arrival has resulted in a serious dint on the potential for notebooks to sell well. With more countries due soon to join those already selling the iPad, and an armload of competitors just about to arrive, the makers of PC laptops should be worried.

Or should they? Let's look at the stats. The bars in the graph above are "US Retail Notebook Y/Y Unit Growth." That means they're tracking how many more laptops were sold each month compared to last year's figure. In December 2009, for example, U.S. consumers bought 70% more laptops than they did in December 2008. But unless we know the figures for December 2007—not included here—we don't know if December 2008 was a particularly depressed month (which, given the cataclysmic state of the economy at the time, seems more than likely). Similarly, the 4% drop in August 2010 means there were 4% fewer laptops sold this year than in August last year. But we don't know if August last year was a bumper sales season.

The only true certainty in Morgan Stanley's report is this quote: "the first time those numbers had actually gone negative." Never before have netbook sales gone down, year-on-year, in any single month. But the iPad isn't the only potential culprit. Consumers are using (ever more powerful) smartphones for low-grade work while on the road. Both the rise of the Android Army and the new iPhone 4 may play into the sales figures.

The one test to see if the iPad is a netbook killer is if it can be reproduced in other nations, with a similar depression in notebook sales after the iPad became available. We'll know soon enough.

Of course, we know the iPad is having an effect: More than 3 million people have handed over more than $500 each for one, meaning they're unlikely to commit hundreds of dollars more to a laptop anytime soon. The time looks ripe for a move to tablet-format devices: It's the next evolution in the portable computing game. But you should be hesitant in assuming the iPad's having such a noticeable affect on a multi-billion-dollar industry so very soon, and based on such tricky stats.

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  • Bo Newman

    "Tricky stats" made nine times more confusing by problematic prose.

    There are reasons why the "industry" makes a distinction between "laptops" "notebooks", and "netbooks." Using the terms interchangeably (intentionally or carelessly) makes it unclear if this trend applies to all three types (the i.e., "notebook industry"), or just to one, or two types. Morgan Stanley sets the stage by using "Notebook" in the chart title, but then talking about "netbook sales." And if the fog isn't thick enough, Eaton switches back and forth between "notebooks" and "laptops."

    Bottom line – who knows? Clearly not Eaton nor the Morgan Stanley Research Department.

    (… and please, don't tell me its just semantics -- its all about the semantics)

  • David Mullings

    "I find it hard to conceive that a system that won't even multitask (such as the iPad) would have such potential."

    Maybe that is the problem, your assumption.

    As someone that easily replaced my work laptop with a 3G iPad, I can conceive of such a system having such potential.

    I do agree with the writer however that it is unlikely and without previous years figures, we cannot make any inferences other than last year vs. this year. Most likely it is a combination of iPad sales, recession and current laptop owners saving cash.

    I need to buy a new laptop but it is cheaper for me to buy a 16GB iPad 3G and an iMac than to buy a new Macbook Pro (and I still have a couple hundred dollars left).

    Now THAT directly hurts laptop sales.

  • Rocco Henderson

    It's highly unlikely that the iPad is a notebook killer. Most likely it's rough economy that's slowing notebook sales down, as would-be purchasers of new notebooks (a good chunk of people have one now) have found higher priorities for what free cash.

    I find it hard to conceive that a system that won't even multitask (such as the iPad) would have such potential. Steve Jobs has the koolaid drinkers and his own public relations employees stretching the interpretation of data, I fear.

  • Larry Lourcey

    I've been putting off buying another laptop until I figure out for sure if the iPad will work. Seems like it is gaining momentum - gotta hand it to Apple!