Apple iPad Eating Up Netbook Market Share

Submitted by lalit on October 5, 2010 - 12:08pm.

Last week, Acer Taiwan president Scott Lin said at a press conference that netbooks will not die. He added even though tablet sales are on rise netbooks will still cross 40 million units in 2011, which would be 20% of total notebook shipment in 2011. However, recent quarterly numbers show that netbook sales are falling for past two quarters after seeing triple digit growth in 2008 and 2009.

In 2009 many analysts predicated that netbooks would continue their meteoric rise and would reach over 40 million units in 2010 about 25% of the notebook market and would cross 40% market share by 2012. But the second quarter shipment numbers by DisplaySearch show that shipments of mini-note/tablet PCs were down 4% Q/Q, and up 29% Y/Y. However, without the 3.3 million iPads shipped in the quarter shipments of mini-note/tablets PCs would have been down 14% Q/Q and 13% Y/Y.


If you look at the numbers in more detail the story that iPad (and not any other vaporware tablet) is eating up netbook market becomes clearer. Sales of netbooks with screen sizes below 9-inch fell 89% from 0.6 million in Q2 2009 to 0.1 million in Q2 2010. The difference of 0.5 million was taken up by iPad. Similarly, sales of netbook with 10-inch screens fell 8% from 7.1 million to 6.5 million, here again the difference of 0.6 million was take by iPad in Q2. So the iPad took away 1.1 million units sales or about 14% of netbook market in Q2 2010 even though the Apple tablet was only available in 8 countries. Overall for Q2 2010, 33% of all netbooks sold were iPads.

DisplaySearch’s forecast for Q3 2010 is that 8.7 million netbooks (without iPad) will ship in Q3 2010, which is 31% growth Q/Q. But when iPad is included in the netbook category the growth rate goes up to 95%, which was the estimated netbook category growth rate for 2010 before iPad was launched. This means that for over 60% of growth in netbook category in 2010 iPad will be responsible.

One mistake all analysts are making in predicating iPad sales in Q3 and Q4 of 2010 is that they are expecting iPad sales for the quarters would remain stagnant at 4.5-5 million units. iPad would be available in about 40 countries by end of Q4 and if anything iPhone sales have shown us in 2007 and 2008, is that iPad sales will grow exponentially with increase in number of countries its available in. iPhone sales saw about 400% jump once iPhone was available in more than 18 countries (went from 1 million units in Q3 2007 to over 4 million in Q3 2008).

If iPad gets just half of that boost by being in 40 countries we will be seeing sales of about 7-8 million iPads in Q4 2010. And that number will be out of the estimated 16.2 million mini-note/tablet PC shipment in Q4 2010, which means iPad will capture about 50% of netbook market in Q4 2010.