Apple’s iPad: Netbook Killer

| Analysis

The netbook never became the killer product the PC market hoped for, and thanks to the iPad, the only killing in that market now is happening to the netbook. In fact, a new study says the netbook market will be completely dead by 2015, and it's all Apple's fault.

Goodbye netbook. iPad brought you down.Goodbye netbook. iPad brought you down.

Netbooks are low powered PC laptops will small screens and keyboards that compromise on pretty much every feature to keep costs low. That gives them a low selling price, which was -- at least at first -- enough to make them sell. Unfortunately for PC makers hoping to score big in the netbook market, those compromises led to consumer disappointment and ultimately to weak sales.

Now an IHS iSupply report says the netbook market has dropped from its 2010 high of 32.14 million units shipped down to an estimated 3.97 million units shipped for all of 2013. Keep in mind that's units shipped, not units sold. In comparison, Apple sold 66 million iPads in 2012, and 22.9 million units in its first fiscal quarter for 2013.

Looking to 2014, iSupply expects netbook shipments to top out at 264,000 units, and that number drops to zero in 2015. While PC sales and shipments have been on a downward trend over the past few years, netbook sales are outpacing that drop by a significant margin, and that drop is tied to the introduction of the iPad.

"Netbooks began their descent into oblivion with the introduction in 2010 of Apple's iPad," the iSupply report said.

Part of the allure of the iPad is the fact that it doesn't feel like an underpowered compromise box, unlike the netbook. Instead of finding ways to cut corners to keep the price down while forcing on OS designed for a bigger display (that would be Windows) onto the devices, Apple chose to start with a completely different design and an operating system that caters to the platform (that would be iOS).

With Android tablets on the market now, it's a safe bet that at least a few netbook sales that otherwise would've happened are going to those tablets. That said, the iPad still commands the lion's share of tablet sales, and with the iPad mini shipping, it's eating into the 7-inch form factor market, too.

All that adds up to a big bucket of doom for the netbook market, and it was pretty easy to see that one coming. PC makers were sure consumers would be fine with "It's too slow," "I can't run some of my apps," and "The battery life sucks," because the price was low. Turns out shoppers were willing to spend a little bit more for good performance, a wide app selection, and good battery life, which sums up the iPad nicely.

The big compromise for iPad users is that they're limited to buying apps from just Apple's App Store, but that seems to be a trade off consumers are willing to make. The compromise they don't seem to want to make is quality for low price -- and that's a lesson many PC makers just can't seem to learn.

The end result is that the netbook market is now on death row and it doesn't look like a reprieve is coming. That, and the PC market now has to deal with its investment in a market that never took off, which is probably a pretty hard pill to swallow.

[Thanks to the LA Times for the heads up.]

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3 Comments

sflocal

Netbooks were an abomination the moment they came out.  I recall years ago of a client of mine asking my opinion of them.  He wanted to buy a bunch of them for their sales force.  I told him to stay away from them for the exact same reasons you mentioned.  Sure enough, the cost was the only important thing so they bought them anyways.

About 2 months later they all sat on the admin’s shelves gathering dust.  If they weren’t broken, the reps simply refused to use them as they were so inferior.

Now we’re all using iPads and everyone is happy.

Shame on those that supported and rallied for such sheer garbage.  It’s a shame that the world’s resources were wasted on all this landfill material.

Good riddance to netbooks.  I can only hope the PC industry has learned from their mistakes but from what I see out there, they have a memory of a gnat.

Constable Odo

All the analysts believed that the Windows netbook was going to be the top mobile device for the next ten years and Apple was going to be the biggest loser of them all.  Now they’re saying the same thing about Android smartphones.  I believe the only thing that matters to Wall Street types is how cheaply a product can be made.  The Windows netbook had everything beat by a longshot when it came to cheap.  A cheap case, cheap components and built for cheapskates.  A sure winner.  A netbook could run all that legacy Windows software, run the wonderful Adobe Flash and had a whole bunch of ports.  What more could anyone want?

Netbook were really never designed to run Windows and were likely built for consumers in third-world nations where any computer would be a step up.  It was never intended for consumers of the lands of milk and honey.  They should have been able to afford far better than that crap.  However, the netbook became trendy and despite it having such cheap and underpowered components, the techies took to them in droves.

Well, they’re going away now and I’m sure plenty of tech-heads and cheapskates are mourning their loss.  At least the iPad is still around despite supposedly not being able to hold a candle to the Windows netbook.  I’m glad consumers had the final say.

geoduck

I knew a few people that had NetBooks. They were serious IT Geeks who immediately ripped out Windows, installed Linux and used them to remote into servers. They had plenty of power as long as they only were used as dumb terminals and for Command line work.

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