The iPad is Eating Away at the Netbook Market, but What’s that Mean for Apple’s Device?

This image described by iPad, netbook, Slate Computing, Casual Computing

Just before the iPad was released many wondered where it would fit into their gadget collection. Some said it wasn’t portable enough to be carried around like an iPhone, while it didn’t have enough features to replace their laptop.

A little over a month into the iPad’s lifespan, some users have already figured out how they want to use their iPads. According to March 2010 Alphawise data, 44 percent of those buying their iPads have decided that they will not buy a laptop as a result of their purchase. That says a lot about that 44 percent. They represent almost half of the surveyed laptop buyers, and their main need out of the computer was likely only two things: Email, and browsing the web.

The chart below shows the data from the survey, showing iPad Cannibalization. (Which is actually just a fancy way of saying “Stuff people surveyed aren’t buying thanks to their new iPad”):

This image described by iPad, netbook, Slate Computing, Casual Computing, Stanley-100506-1

Interestingly, the iPad seems to have affected the sales of these other devices: Notebooks, the iPod Touch, eReaders, desktop computers and even handheld systems such as the DS and PSP. Again, it’s important to stress that this is amongst people surveyed.

One of the biggest blows, however, comes to the netbook market, which just a year ago seemed to be the next hot thing in computing. It saw massive growth year-over-year in July and slowly declined. Then in April, the month the iPad launched, netbooks only saw a 5 percent growth over same month one year before. Though the chart shows a steady decline over the months leading up to then, some of that may be a result of the iPad coming into the picture.

This next chart is data from NPD and Morgan Stanley Research. It shows the aforementioned decline in netbook sales:

This image described by iPad, netbook, Slate Computing, Casual Computing, Stanley-100506-2  

It’s easy to see the iPad as a netbook replacement scenario. Some will say they are entirely different devices. That’s true as far as looks go. But many of those buying netbooks use the device for simple tasks such as checking email or browsing the web, much like they would with the iPad. Plus, Apple is excellent at marketing to new audiences. That may sound like a stretch, but when a 70-year-old grandmother can identify an iPad, something’s going on.

As discussed last week in iSmashPhone, it’s likely that a lot of those buying the iPad are those “casual” computer users. They aren’t typically tech savvy, and they usually don’t exhibit any sort of dexterity when using a mouse. Sure, they can get around, but it tends to take them a bit longer. A 10-inch slab of glass with a touch GUI, however, allows for even inexperienced computer users to navigate easily. Of course, this is only the beginning.

The question remains whether the iPad will continue in popularity. The first month has been strong, and we can argue all night whether there are one million idiots out there, or one million people who saw the future of computing. To some, the iPad looks like the next great step in computers. Maybe the iPad can avoid a fate similar to the netbook.

In our opinion, netbooks will morph into tablets which will run mobile OS (Android, Web Os, Chromium)

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