Apple's iPad Seen Cannibalizing Netbook Sales

For the last several years, netbooks have been a booming business for a number of computer manufacturers as consumers look for low-cost, portable machines to browse the Internet and perform other light tasks. Apple resisted entering the netbook market, repeatedly pointing to numerous shortcoming of such devices as it wrapped up development on its iPad tablet device, its own take on how consumers will want to consume music, video, and Web content in a portable form factor.

112454 huberty netbook growth

Fortune today reports on a new note from Morgan Stanley research analyst Katy Huberty that reveals just how dramatically growth in the netbook industry has slowed since the beginning of the year. Huberty attributes the slowdown to Apple's iPad, which saw tremendous publicity leading up to and since its introduction in late January.

As her chart (above) shows, 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.

Huberty also cites data from March showing that 44% of surveyed consumers who were planning to purchase an iPad were doing so instead of purchasing a notebook or netbook computer, the largest category of cannibalized products. Notably, over half of those customers were planning to purchase an iPad instead of an Apple notebook, with the remainder forgoing a non-Apple netbook or notebook.

112454 huberty ipad cannibalization

Also of note, a full 41% of those surveyed said that they would be purchasing their iPad instead of an iPod touch, suggesting that Apple may take a hit to that portion of its sales going forward. The news isn't as bad as it appears, however, as Apple is undoubtedly happy to be keeping those customers in the Apple fold and "upselling" them to the more expensive iPad.

Popular Stories

Apple Intelligence General Feature

Apple Intelligence Features Not Coming to European Union at Launch Due to DMA

Friday June 21, 2024 9:44 am PDT by
Apple today said that European customers will not get access to the Apple Intelligence, iPhone Mirroring, and SharePlay Screen Sharing features that are coming to the iPhone, iPad, and Mac this September due to regulatory issues related to the Digital Markets Act. In a statement to Financial Times, Apple said that there will be a delay as it works to figure out how to make the new...
Apple WWDC24 Apple Intelligence hero 240610

Apple Explains iPhone 15 Pro Requirement for Apple Intelligence

Wednesday June 19, 2024 4:48 am PDT by
With iOS 18, iPadOS 18, and macOS Sequoia, Apple is introducing a new personalized AI experience called Apple Intelligence that uses on-device, generative large-language models to enhance the user experience across iPhone, iPad, and Mac. These new AI features require Apple's latest iPhone 15 Pro and iPhone 15 Pro Max models to work, while only Macs and iPads with M1 or later chips will...
amazon echo dot

Amazon Could Charge Up to $10/Month for Alexa

Friday June 21, 2024 2:55 pm PDT by
Apple competitor Amazon is working on a revamp of its Alexa assistant, and the new version could cost up $10 per month, according to a report from Reuters. The upcoming version of Alexa will support conversational generative AI, and Amazon is planning for two tiers of service. There will be a free tier and a second, premium tier that is priced at $5 at a minimum, with Amazon considering...
General Spotify Feature

Spotify Launches Cheaper $10.99/Month Premium Plan Without Audiobooks

Friday June 21, 2024 4:22 pm PDT by
Spotify today announced the launch of a new Basic paid plan that offers a small discount for dropping access to audiobooks. Priced at $10.99 per month, the Basic option includes all of the music benefits of Spotify like ad-free playback, but without added monthly audiobook listening time. The $11.99 standard Premium Individual plan that Spotify offers includes ad-free playback and 15 hours...
iPhone 16 Pro Max Generic Feature 2

5 Biggest Changes Rumored for iPhone 16 Pro Max

Wednesday June 19, 2024 5:00 am PDT by
Given Apple's rumored plan to add an all-new high-end tier to its iPhone 17 series in 2025, this could be the year for Apple to bring its boldest "Pro Max" model to the table — the kind of iPhone 16 upgrade that stands tall above its siblings, both figuratively and literally. If you have been holding out for the iPhone 16 Pro Max, here are five of the biggest changes rumored to be coming...