John Paczkowski

Recent Posts by John Paczkowski

Forecast: 19 Million Notebooks Lost to Tablet Cannibalization (Meaning iPad) in 2011

If the tablet PC (which has so far been defined by the iPad) isn’t entirely the notebook cannibal it’s often seen as, it certainly has some cannibalistic tendencies. And those are growing stronger as devices like the iPad begin finding more traction among the production-oriented users that were expected to ignore them.

During its last earnings call, Apple noted that over 65 percent of the Fortune 100 have deployed or are piloting the iPad. With that in mind, some analysts have begun reasses the cannibalization rate of tablets on the notebook industry and the number that Goldman Sachs analyst Bill Shope has come up with is pretty interesting.

He figures tablet unit shipments will jump 54.7 million in 2011 with 35 percent PC unit cannibalization and to 79.2 million in 2012 with 33 percent cannibalization. Overall, he expects 19.1 million notebook units to be lost to tablets in 2011 and 26.1 million to be lost in 2012.


Those are some pretty aggressive numbers. And while Shope concedes they might be difficult to digest given the market’s perception of the tablet as a threat to netbooks only, he does have some recent data to back them up.

“We recognize that it is difficult to accurately predict the cannibalization rate of such a nascent market, but we believe early evidence supports our views,” Shope writes. “In fact, in Goldman Sachs’ recent IT spending survey (published on November 5, 2010), 51 percent of respondents said they expected some degree of notebook cannibalization from tablets. This is an important result because: (1) it’s a corporate survey, and tablets will likely have a more significant impact on the consumer market, and (2) netbooks represent an insignificant component of corporate PC purchases. We suspect December quarter retail data is likely to provide even more interesting tablet cannibalization data points.”

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik