Apple's iPad is likely a factor in declining U.S. notebook sales, according to a Morgan Stanley analyst. Other analysts have suggested the iPad is likely cannibalizing the low-end notebook market.
Apple's iPad is likely cannibalizing notebook sales, says a Morgan Stanley
analyst. That would dovetail with statements by other analysts, who have blamed
a drop in sales of lower-cost notebooks on the bestselling tablet PC.
"We expect tablets to continue to pressure PCs as more vendors launch products
(e.g., Dell Streak and Samsung Tab) and Apple expands its iPad
distribution," Morgan Stanley analyst Katy Huberty wrote in a research
note, which was quoted
by Fortune Magazine
Huberty's note incorporates data from research firm NPD Group, which shows
six months of declining U.S.
sales for notebooks from March to August. By that point, overall U.S.
notebook sales were down 4 percent year-over-year-the first time that
particular segment experienced such a dip. Early September data suggests a
similar negative trend. "Tablet cannibalization" is a significant
factor in those numbers, she reportedly wrote.
Huberty also expects sales of 50 million tablets in 2011.
Best Buy plans to promote the iPad heavily during the holiday shopping
season, and expand distribution of the device to all its 1,093 stores in the United
States. "People are willing to disproportionally
spend for these devices because they are becoming so important to their
lives," Brian Dunn, CEO of Best Buy, is
quoted as saying in a Sept. 14 Wall Street Journal interview
. "We are
really positioning the company to be the place where people can come and see
the best of the connected world."
Other analysts have suggested the iPad could affect lower-end PC sales.
"Sales of traditional notebooks appear to be feeling pressure from the
iPad, causing a scramble by vendors to launch iPad-like tablets," UBS
analyst Maynard Um wrote in a Sept. 8 research note, which was excerpted
on the blog Apple Insider
. "We believe that a majority of this impact
is occurring on the lower end of PC sales as the iPad is priced close enough to
this range that it becomes attractive to consumers looking to make purchases
within this segment," he wrote.
Um, who predicted sales of 28 million iPads in 2011, added: "Consumers
who purchase iPads may be more willing to delay purchases and upgrades of
existing PCs." He stopped short of suggesting that the iPad has started to
cannibalize the notebook market.
Apple executives have discussed the prospect of iPads cannibalizing PCs.
"If it turns out that the iPad cannibalizes PCs, that, I think, is
fantastic for us because there are a lot of PCs to cannibalize," Apple COO
Tim Cook said during the company's July 20 earnings call. "It's still a
The iPad now ships within 24 hours from the company's online store. This
suggests that production capacity has caught up with demand for the device.
Apple reported sales of 3.27 million iPads for the third quarter of fiscal