Since Apple announced the iPad in January there has been widespread speculation about what impact it would have on the netbook market. A Morgan Stanley report released earlier this month suggested the Apple tablet has indeed cannibalized netbook sales, plummeting in January and again in April, when the iPad was launched.
The study showed netbook sales growth tumbling from a high of 641% in July to just 5% in April. Other analysts weren't so sure about the link between the iPad and netbook sales. Ross Rubin of NPD Group pointed out that netbooks had a strong holiday season, so the fall-off at the start of the year was chiefly seasonal.
Year-over-year growth for netbooks in 2009 was also very high because sales were starting from such a small base in 2008, said Rubin. Duplicating those gaudy figures in 2010 would be difficult. So factors other than the iPad may have played a bigger role in declining netbook growth.
But new findings from a survey by electronics shopping site Retrevo tend to favor those in the iPad-is-killing netbooks camp. The company found that the 30% of people who said they held off buying a netbook when the iPad was announced in January have since bought the Apple device. (Forty percent who held off eventually bought a netbook anyway. Another 30% had not delayed getting a netbook.)
And of people now looking to buy an iPad or netbook, 78% are leaning toward the former.
Worse, netbooks are now getting squeezed from the other side by falling laptop prices, according to Retrevo. Of people who bought a laptop or netbook last year, 65% got a laptop and 35% a netbook. And among those looking to get either type of device this year, people are leaning toward laptops by the same proportion.
The iPad may not be singlehandedly slaying the netbook, but "it's definitely taking market share away," said Manish Rathi, co-founder and vice president of marketing for Retrevo, citing the nearly one-third of people who switched from getting a netbook to an iPad. Retrevo says the data in its Pulse reports is based on a survey of more than 1,000 people in the U.S. with representation across gender, age, income and location.
Rathi maintained, however, there's still a "use case" for the netbook as a portable, lightweight alternative to a laptop or PC, although future sales growth will probably come in international markets rather than domestically. He pointed out that Intel recently said netbooks are going to sell well in countries like Mexico and India where they are more likely to serve as primary computers.
In the U.S., "this is the year of the tablet," said Rathi. In addition to the iPad, which Apple said had sold 1 million units in its first month, he pointed to rival devices expected to come from HP, through its acquisition of Palm, and from the pairing of Google and Verizon Wireless. In that vein, Retrevo has another survey underway asking about the potential of a Google tablet.
It was rumored that the company might unveil its tablet initiative at the Google I/O developer conference last week, but nothing was announced. But the results from the Retrevo survey on a Google tablet should be out early next week, said Rathi.
With the iPad selling for a minimum of $500, he suggested there is room for competitors to try to undercut Apple on price. "A lot of people want to buy an iPad, but they don't have a reason to," he said. "Five hundred dollars is a very expensive price point for entertainment."