IPad: Tonight We Feast on Laptop Flesh! [Updated]
Notebook sales are on the decline and the iPad appears to be responsible.
That’s the word from Morgan Stanley analyst Katy Huberty, backed up by some recent comments by Best Buy (BBY) CEO Brian Dunn.
In a research note issued this week, Huberty points out that retail notebook growth in the United States fell four percent year over year in August after six months of decelerating growth. It did the same thing in the first week of September. And to Huberty, that’s the beginning of a trend. “We expect tablets to continue to pressure PCs as more vendors launch products (e.g., Dell Streak and Samsung Tab) and Apple expands its iPad distribution (e.g., China and five Latin American countries by September 17),” she wrote, adding that her model currently assumes the iPad is cannibalizing about 25 percent of notebook sales.
A big number, but don’t be too quick to dismiss it, because it’s actually smaller than the one put forth by Best Buy CEO Brian Dunn, who probably has a better sense of the market than Huberty. In an interview with The Wall Street Journal, Dunn said the retailer’s internal estimates suggest the iPad has cannibalized laptop sales by as much as 50 percent.
Of course, Best Buy’s metrics reflect just one portion of the laptop market–Stateside consumers; there are lots of laptops being sold elsewhere in the world and in the enterprise sector as well. Still, a head turner of a number and one that suggests the PC market is changing–and quickly too.
UPDATE: This just in from Best Buy, which has presumably gotten an irate phone call or two from the manufacturers of those laptops Dunn says fewer people are buying these days.
Statement: Reports of notebook, netbook sales declines grossly exaggerated
RICHFIELD, Minn., September 17, 2010 –In a statement today, Brian J. Dunn, CEO, Best Buy Co., Inc. (NYSE:BBY), likened recent rumors of a pending decline in notebook and netbook sales to a legendary Mark Twain-ism:
“The reports of the demise of these devices are grossly exaggerated,” Dunn said. “While they were fueled in part by a comment in the Wall Street Journal that was attributed to me, they are not an accurate depiction of what we’re currently seeing. In fact, we see some shifts in consumption patterns, with tablet sales being an incremental opportunity. And as we said during our recent earnings call, we believe computers will remain a very popular gift this holiday because of the very distinct and desirable benefits they offer consumers. That’s why we intend to carry a broad selection of computing products and accessories to address the demand we anticipate this season.”