electronics

Cannibalization Among IPad Buyers Down 50%

Ipad2

The iPad is many things, but it's not necessarily a PC-killer.

According to The NPD Group, only 14% of early iPad adopters (those who owned an iPad for six months or more) bought the device instead of a PC, and the rate dropped to 12% among people who purchased an iPad more recently. In fact, cannibalization of netbooks is down 50% among those recent iPad buyers, compared with early adopters.

While the market for Windows-based PCs that are $500 or more has declined by 25% between October 2010 and March 2011, much of that can be attributed to the launch of Windows 7 last year, says Stephen Baker, vice president of industry analysis at NPD. At the same time, the under-$500 segment of Windows computer notebooks increased 21% over that same period, according to NPD's retail tracking service.

"We think that most of the questions in the PC market have to do with really difficult comparisons for the prior year," Baker tells Marketing Daily. "What you tend to see after an OS launch is a big boost in sales. Once we get into the back-to-school season, we'll know more about the [overall] PC market."

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Meanwhile, the iPad has become that true third device bridging the gap between phone and computer, Baker says. And in doing so, the device has added billions to the consumer electronics industry. According to NPD's Apple iPad Owner Study II report, three-quarters of those who bought the iPad for themselves said they had no intention of buying anything else. The question is, how will that change when more competitors enter the market?

The real question is -- do we have a tablet market or an iPad market?" Baker says. "That's something that isn't quite clear yet. We really don't know much of the long-term business."

One thing that is likely to develop as more tablets catch on is a movement away from their having cellular capability. Citing evidence that sales of Apple's WiFi-only iPad jumped by a third during the holiday season (and that wireless carrier stores only account for 3% of total sales during the holiday) indicates that tablets with 3G or 4G capabilities will only amount to a niche market, Baker says.

"The iPad is not a product you're going to take out of your pocket as you walk down the street to check your email," Baker says. "It's not that portable of a device. It's mobile, but it's not portable."

 

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