Don't Blame Tablets for Slow Consumer PC Market, says NPD

By Ashok Bindra May 13, 2011

The consumer PC business is not struggling because of Apple’s iPad or other tablets in the market. In fact, according to market research firm NPD Group, only a small percentage of iPad owners are abandoning notebooks or laptop computers.

A recent NPD study shows that only 14 percent of early iPad adopters (iPad owners of six months or more) abandoned a PC purchase for an iPad, and that dropped to just 12 percent of iPad owners who purchased over the past holiday season. In fact, cannibalization of netbooks is actually down by 50 percent among more recent iPad buyers, when compared to early adopter buyers, says the NPD study.

“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 Stephen Baker, vice president of industry analysis at NPD.

He added, “Overall it appears that the vast majority of iPad purchases to-date have been incremental to the consumer technology industry.”

NPD's Retail Tracking Service reports that under $500 segment of the Windows consumer notebook market grew by 21 percent for the 6 months ending March 2011 to become the largest segment of the consumer notebook market.

Baker reports that “The conventional wisdom that says tablet sales are eating into low- priced notebooks is most assuredly incorrect.” Continuing to comment on this trend, Baker said, “The over $500 Windows consumer notebooks market is where PC sales have been impacted the most, with a 25 percent decline from October 2010 to March 2011.”

It's more than likely that iPad sales added billions of dollars to the industry's coffers after years of ASP declines draining the market. As per the NPD analyst, 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, the analyst said. 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, as per the NPD report.

Meanwhile, tablets are gaining momentum. NPD predicts that tablet sales are poised to surpass eReader penetration first in Canada. While tablets overall will grow to surpass eReaders, media reports indicate that Intel Oak Trail processor powered tablets are expected to give iPads tough competition.

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Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

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