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    iPads, Tablets Not Cannibalizing PC Sales: NPD

    Written by

    Michelle Maisto
    Published May 12, 2011
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      The Apple iPad, and the growing tablet market it spawned, aren’t to blame for faltering consumer PC sales, according to a new report from research firm NPD. The finding bucks the popular conceit that tablets are “cannibalizing” the PC market, and netbook sales in particular.

      Instead of tablets, the real culprits were the launch of Windows 7 and the accompanying jump in netbook sales, NPD analyst said in the May 10 report.

      “The conventional wisdom that says tablet sales are eating into low-priced notebooks is most assuredly incorrect,” Stephen Baker, vice president of industry analysis at NPD, said in a statement. “The over $500 segment of the [Microsoft] Windows consumer notebooks market is where PC sales have been impacted the most, with a 25 percent decline from October 2010 to March 2011.”

      According to NPD, 14 percent of consumers who purchased an iPad six or more months ago – the early adopters – abandoned a PC purchase in favor of the tablet. Over the 2010 holiday season, that fell to 12 percent.

      “In fact,” NPD said in the statement, “cannibalization of netbooks is actually down by 50 percent among more recent iPad buyers, when compared to early adopter buyers.”

      NPD’s Retail Tracking Service found that the under-$500 segment of the Windows consumer notebook market increased by 21 percent during the six months ending March 2010, making it the biggest segment of the consumer notebook market.

      Sales of iPads to the industry, it appears, are gravy – with 75 percent of consumers who purchased an iPad saying they had no intention of buying anything else, making those purchases, said NPD, “incremental sales volume.”

      The iPad and its ilk have additionally helped to put dollars into the retail market, the firm reported, through sales of accessories. Cases have been the most popular add-on, with 83 percent of iPad owners springing for them – and not always with those dollars going back to Apple. Fifty percent of cases were a non-Apple brand, said the firm, and spreading the wealth across retailers, more than 50 percent of cases and more than 60 percent of screen protectors were purchased at a different store than where the iPad was purchased.

      “Best Buy and Apple sold [75 percent] of all devices during the holiday period,” wrote NPD. “Comparatively speaking, the carrier stores had much weaker results, accounting for just 3 percent of sales.”

      Accounting for this, NPD added, is an “indifference” toward 3G connectivity, with most consumers using their tablets at home and being content to rely on WiFi.

      “When every penny counts, features that aren’t core to the user [become] increasingly marginalized as manufacturers fight for every sale,” it added.

      So what’s keeping those pennies from PC manufacturers?

      “The explosion of computer sales when Windows 7 launched, as well as the huge increase in netbook sales at that time, are much more to blame for weak consumer PC sales growth than the iPad,” said Baker. “Overall, it appears that the vast majority of iPad purchases to date have been incremental to the consumer technology industry.

      During the first quarter of this year, PC sales dipped 1.1 percent, to 84.3 million units, by Gartner’s count, and 3.2 percent, to 80.1 million, by IDC’s. Both firms said tablets were partly to blame, along with PC vendors’ need to step up.

      “‘Good-enough computing’ has become a firm reality, exemplified first by [netbooks] and now media tablets,” IDC senior research analyst Jay Chou said in an April 13 statement. “Macroeconomic forces can explain some of the ebb and flow of the PC business, but the real question PC vendors have to think hard about is how to enable a compelling user experience that can justify spending on the added horsepower.”

      Michelle Maisto
      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University.

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