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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 big market.”
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 2010.