Tablets, a promise undelivered?

NPD Group’s recent survey released suprising insights.   Tablet sales, including iPads, are not cutting into PC sales   Moreover, J.P Morgan believes that tablet manufacturers who aren’t making iPads are actually cutting their production schedules for 2011.

So, what does all this mean?

According to the NPD Group report only 14 percent of early iPad adopters (iPad owners of six months or more) abandoned a PC purchase for an iPad, dropping to just 12 percent of iPad owners who purchase at Christmas 2010.  Cannibalisation of netbooks is actually down by 50 percent among more recent iPad buyers, when compared to early adopter buyers.

According to the NPD Group research, the explosion of computer sales when Windows 7 launched, as well as the huge increase in netbook sales at that time, are to blame for weak consumer PC sales growth – not the iPad.   In short, the majority of iPad purchases to-date have been incremental to the consumer technology industry.

According to NPD’s Retail Tracking Service, the under £400 ($500) segment of the Windows consumer notebook market grew by 21 percent for the 6 months ending in March 2011 to become the largest segment of the consumer notebook market.

The conventional wisdom that says tablet sales are eating into low- priced notebooks is incorrect.   iPad sales added billions of dollars to the industry’s coffers after years of ASP declines draining the market.   According to the report, nearly 75 percent of consumers who bought an iPad for themselves said they had no intentions of buying anything else, making all of those iPad purchases incremental sales volume.

That additional volume has spurred the development of new accessories opportunities that also serve to direct more money into the retail market.   Approximately 83 percent of iPad owners have purchased an accessory for their iPad, with cases being the most popular. The sales opportunities are being spread across all manufacturers and retailers, not just Apple.

It’s quite revealing that, as I outlined in an earlier post, that publishers are slowing down developments for the iPad and tablets.   BBC Vision has gone even further, scrapping 100 posts in their multi-channel marketing division to focus on a mix of TV and online only.   So, there is a slow-down in developments and ambitions as the hard reality of cost versus return hits home for publishers.   The desktop, aging as it might be, is here to stay for a little longer – perhaps with an enhanced role for smartphones.   Of course, this may also be a feature of the recession affecting Europe and the USA in particular.   Time will tell.

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