Apple iPad Cannibalizing Notebook Sales, Best Buy CEO Says

Best Buy's CEO says Apple's iPad sales are eating into notebook and netbook sales; more tablets are on the way.

In a report that suggests fears of tablet computers biting into the notebook and netbook markets is justified, Best Buy CEO Brian Dunn told The Wall Street Journal that Apple's iPad has "cannibalized" sales of notebooks by as much as 50 percent. Dunn told the paper that sales of smartphones and portable computers continued to rise, thanks in part to devices like the iPad. It's a very different environment now," the chief electronics analyst for market researcher NPD Group Stephen Baker told the Journal. "The real cool stuff now will be the tablets, e-readers and probably the higher-end digital cameras."

A July report from a Barclays Capital analyst said Apple would sell about 20 million iPads in 2011, negatively affecting lower-cost notebooks as well as the netbook market. Other analysts have also suggested growth for the tablet PC market, with research firm IDC estimating that worldwide media tablet shipments would total 46 million units in 2014. "IDC expects consumer demand for media tablets to be strongly driven by the number and variety of compatible third-party apps for content and devices," analyst Susan Kevorkian wrote in a May statement.

A report by research firm iSuppli came to a similar conclusion. This year, the firm said it expects the iPad to account for 74.1 percent of global tablet shipments, with the remaining portion going to "a mix of older PC-type tablet products and competitive slates." In 2011, as the competition begins seriously filling out, iSuppli still expects Apple to command 70.4 percent of the market, and nearly two-thirds market share through 2012. At present, while a number of tablet devices are set to launch - running Windows 7, Android and webOS - iSuppli said it believes none of these are ready to be serious competitors to the iPad.

That hasn't stopped the competition from trying, however. In the wake of the iPad's successful launch, computer makers are scrambling to release their own tablet devices. Avaya just this week unveiled the Flare Experience, which includes an 11.6-inch desktop video device and is aimed at business professionals. It is intended to offer campuswide mobility via SIP (Session Initiation Protocol) and WiFi, and offers USB connectivity for such options as a keyboard, 3G/4G access or a thumb drive. Meanwhile Cisco unveiled its Android-powered Cius communications tablet, which is designed to compete more in the business space than with Apple's consumer-oriented iPad.

On the consumer side, Samsung unveiled its Galaxy Pad tablet, which includes the Android operating system and features such as 3G and WiFi capability, a 16:10 screen ratio, a SDHC memory expandability, a DMB tuner for TV viewing and something the iPad lacks-a front-facing camera for video calling. Soon after, Toshiba Europe introduced its media tablet, the Folio 100, a 10.1-inch touch screen device, which will retail for ?ö?®??399, or roughly $500, will be available during the fourth quarter of 2010 throughout Europe, Middle East and Africa, according to a company release.

At the Intel Developer Forum (IDF) this week in San Francisco, Dell executive David Zavelson showed off the 10-inch Inspiron Duo tablet, which can be either used as a tablet PC or reconfigured into a netbook-style machine complete with a keyboard. The Dell device will be powered by a dual-core Atom chip, and will include a touch interface developed by Dell that will offer one-touch access to applications and content.