Apple iPad May Be Hurting Netbook Sales

Is the Apple iPad hurting netbook sales?
This was the question retailer Retrevo looked to answer with a recent survey that asked consumers what products they considered purchasing over the last year and what they actually bought. What Retrevo discovered was a netbook industry likely to face slowing sales, but still far from troubled.
Among consumers who considered buying either a tablet or netbook and were asked if they held off their purchase until after Apple’s January introduction of iPad, 30 percent said no – that they went ahead and bought a netbook. Another 70 percent held off for the announcement, and 30 percent of those respondents then purchased an iPad.
“In past years, the netbooks took the market by a storm. With Intel Atom chip sets, long battery life, small form factors, and low price they offered a great alternative to expensive, bulky laptops,” Andre Eisner, Retrevo’s director of community and content, wrote on the Retrovo blog May 24. “However, the double whammy of cheaper laptops and the sensational new Apple iPad tablet may be hurting netbook popularity.”
Now that the iPad is on sale and increasingly prevalent, Eisner added, “It looks like consumers who are struggling with the decision to buy an iPad or a netbook are overwhelmingly leaning toward an iPad, with 78 percent in that group [leaning toward] the iPad.”
Among customers who like netbooks, Retrevo reports, the features they find most compelling are portability (with 54 percent placing this top of list), low prices (20 percent) and long battery life (19 percent). While the iPad is certainly the most portable option, pricing for Apple’s tablet starts at $499 and peaks at $829, while netbook prices have held at $400 and lower. Rather than tablets, netbooks now face truer competition on the pricing front from laptops.
In 2009, among mobile PC-purchasing consumers, Retrevo reports that 35 percent bought netbooks, while 65 percent bought laptops – and still this year, among those considering a netbook or laptop, respondents reported being poised to mimic last year’s numbers.
“Laptops offer full-sized keyboards, large displays, optical drives, and now, even longer battery life. They’re still not as ‘portable’ as netbooks but they are getting cheaper,” Eisner wrote, “With netbooks selling close in price to the cheaper laptops, it looks like packaging and portability could become the strongest selling points.”
While research firm Gartner expects the average selling price of mobile PCs to stabilize, the firm reported May 25 that in the first quarter of 2010, the average ASP of mobile PCs was down 15.7 percent from a year earlier. Further, Asus and Acer showed the strongest growth among the world’s top PC makers during the quarter, and Gartner attributed their success to sales in the low-end consumer market.
Retrevo’s Eisner concluded from the survey that, should netbooks continue to become faster and less expensive, they’ll continue to be an attractive alternative to laptops and other mobile Internet devices.
“Intel recently claimed netbooks were going to sell well in countries like Mexico and India, where they may serve as primary computers,” Eisner explained. “However, don’t expect to see the record growth continue for netbook sales in the U.S. As consumers find the iPad irresistible and inexpensive laptops more practical, we predict netbook sales will get squeezed from two sides and will not be able to maintain past growth rates.”
Research firm ABI has forecast netbook sales to reach 58 million units by the end of 2010 – up from 2009’s total of 36 million units.