Report: Tablets Could Cannibalize Netbook Shipments - HotHardware
Report: Tablets Could Cannibalize Netbook Shipments

Report: Tablets Could Cannibalize Netbook Shipments

The iPad frenzy is still going strong 3 days after Apple's "magical" tablet launched, and it's quickly becoming clear that this is just the beginning. Coming just around the corner is HP's Slate, a Windows 7-based tablet that will duke it out with the iPad, and so will every other upcoming tablet device currently in the pipeline.

Something has to give in the portable PC market, and according to DisplaySearch, netbooks will be the segment to budge. The concern for PC makers, says DisplaySearch, continues to be the razor-thin profit margins associated with netbooks. For this reason, manufacturers are expected to shift their focus to tablets and other higher-margin products.



This isn't to say that netbooks will soon be extinct, and in fact the market segment will continue to grow. DisplaySearch predicts that netbooks will account for about 20 percent of all portable PC shipments in 2010. And even though the profits aren't as high on netbooks, low pricing continues to be a big draw for consumers, as the average selling price has dropped from $400 to a little than $300. By comparison, Apple's iPad, which is expected to make up the bulk of tablet sales this year, starts at $499.
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The iPad frenzy is still going strong 3 days after Apple's "magical" tablet launched, and it's quickly becoming clear that this is just the beginning. Coming just around the corner is HP's Slate, a Windows 7-based tablet that will duke it out with the iPad, and so will every other upcoming tablet device currently in the pipeline.

I'm not seeing the craze for tablets, to be honest. And yet the two computer giants are going head to head to see who can make the better tablet based computer. 

Something has to give in the portable PC market, and according to DisplaySearch, netbooks will be the segment to budge. The concern for PC makers, says DisplaySearch, continues to be the razor-thin profit margins associated with netbooks. For this reason, manufacturers are expected to shift their focus to tablets and other higher-margin products.

I suppose that this answers at least one question of mine. Profit margins are definitely low for netbooks. People want to do more than just access the internet and write papers. The netbooks that were issued to our school are aweful, and I don't think they sport any kind of netbook designed processor inside. 

But why turn to tablets? Maybe it's the next best thing in portable computing, like you said. I can definitely support the fact that portable computing is getting more and more important, especially now that its becoming more readily available to the masses. 

This isn't to say that netbooks will soon be extinct, and in fact the market segment will continue to grow.

I hope netbooks don't become extinct either, we just saw how IE 9 will have GPU recognition for them. Hopefully this will gives things an edge before the recognition feature becomes available for tablet PC's. 

DisplaySearch predicts that netbooks will account for about 20 percent of all portable PC shipments in 2010. And even though the profits aren't as high on netbooks, low pricing continues to be a big draw for consumers, as the average selling price has dropped from $400 to a little than $300.

I believe that the profit percentage is 20% is because netbooks are popular among college students. I'll be going to college as a freshmen this fall semester and it will be nice to have a small, portable PC that I can take electronic notes on, and download power points and other documents from the schools server. 

It's good for people who want to keep a their main computer at their home or in their dorms, while taking a netbook around with them. 

 

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Marius Malek:

I suppose that this answers at least one question of mine. Profit margins are definitely low for netbooks. People want to do more than just access the internet and write papers. The netbooks that were issued to our school are aweful, and I don't think they sport any kind of netbook designed processor inside. 

But why turn to tablets? Maybe it's the next best thing in portable computing, like you said. I can definitely support the fact that portable computing is getting more and more important, especially now that its becoming more readily available to the masses. 

 

 

Companies are probably turning to tablets because it gives them more profits than the netbooks. They won't kill off the netbook, but they will probably focus more on the tablets instead. It may not be the best thing yet, but they will probably try and make it to be the best thing in that price segment.

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Ahh, capitalism. 

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Well with anything tablet wise besides the "beloved" iPad you have more options. With the HP Slate unit as well as any others I have seen besides the apple you have USB ports. Most of them also have a lean device such as a rear slot pop out, there are also smaller keyboards, and in general there bigger screens than a netbook or iPad. Not to mention in general the components perform better. So grab an hp slate and a smaller keyboard you have more than a netbook which is also completely mobile. This is what I was talking about months ago (and tried to patent one as well).

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Well this is unexpected. I've never heard of tablets cannibalizing netbooks but then again, you've never seen Apple release a tablet and the market follows through.

In the past. I've seen tablets which could become notebooks, I suppose that most tablets out there will be copying the iPad but we gotta remember that there were tablets before the iPad.

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TaylorKarras:
 we gotta remember that there were tablets before the iPad.

This is true. But unfortunately Steve Jobs has one of the most famous namebrands stamped on all of his products. As said before, when you buy a product from apple, you are also buying the brand. 

It's like a BMW. When you buy one, you aren't buying a car, you are buying a BMW. It makes you feel classy, and a step above the rest of your citizens. Oh and Mercedes, especially Mercedes. 

However, through a little bit of research, we can understand that we can get a better, more affordable car, that has better performance than the other two. 

 

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I completely agree with Marius Malek.

People just don't buy products (and their specs), just buy the brand and what it stands for. The car example is a great one. People are basically paying for the car and the status it gives you. In essence, you could almost consider this as a spec not shown on paper. So if this spec isn't important but something else is (like price), then buy the more affordable car that does what you need it to.

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AHHH...The Turtleneck zombies!

Putting a brand on something doesn't make it worth purchasing. remember the Atari Jaguar, and Nintendo Dreamcast had good brand names behind them.

This has nothing to do with capitalism. It is only using the same guise, while complaining the others are evil, only to make you want to buy, without having any kind of integrity in their business practices.

So y'all would rather buy products made in some foreign country at the same or inflated prices. While your neighbors don't have the ability to have a job building them. Then when something goes wrong, you end up having no recourse, and end up being ripped off. Only to be offered a discount if you buy the next version of the product at an increased price? All appealing to the environmentalist market while, they make you buy new disposable tech every six months or whenever someone breaks out a turtleneck. remember Wozniak was the real Hippie:)

A good marketing campaign...does not make a good product. Mercedes and BMW have their brandnames because they have provided quality and customer service for more than 60 years. Also remember how Mercedes and BMW got their start! It was only after they had to exceed quality expectations and prove themselves, did they end up earning a name for themselves.

Companies like HP are proven in giving customers quality and price. They did have to improve their customer service, and I believe they have and moved forward. This is how we get good products for good prices.

I think HP will be to BMW, as Apple will be to DeTomaso :P

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I've been reflecting on this for quite a bit. It is noted that consumers are morons who likes to buy the latest trend or gimmick (i.e. *COUGH*Wii sales plummeting*COUGH*)....especially when they have no idea what they are buying. However, let us think about this in a marketing perspective. As far as I recall, netbooks are rarely advertised in Canada unless it is bundled as a perk on a data or cellphone plan. I don't remember when it's solely advertised for what it is. Netbooks are targeted more towards the non-mainstream which explains why Apple passed on the idea in order to maintain their mainstream image. Marketing is all about how to exploiting image to your advantage by listing features that contains a lot of flash and style. Is that a bad thing? Not necessarily since marketing is a competitive business that thrives on dominance. However, that being said, consumers are either too lazy or too gullible to get the full information. Although it is true that the decision lies on the consumer themselves, consumers must realize that marketers have a limited fiduciary duty. Laptops aren't going anywhere. It is way way too early to speculate that the Ipad will be revolutionary. Let's look back 6 months from now to determine if netbooks met its doom by the Ipad.

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Kyouya:

I've been reflecting on this for quite a bit. It is noted that consumers are morons who likes to buy the latest trend or gimmick (i.e. *COUGH*Wii sales plummeting*COUGH*)....especially when they have no idea what they are buying. However, let us think about this in a marketing perspective. As far as I recall, netbooks are rarely advertised in Canada unless it is bundled as a perk on a data or cellphone plan. I don't remember when it's solely advertised for what it is. Netbooks are targeted more towards the non-mainstream which explains why Apple passed on the idea in order to maintain their mainstream image. Marketing is all about how to exploiting image to your advantage by listing features that contains a lot of flash and style. Is that a bad thing? Not necessarily since marketing is a competitive business that thrives on dominance. However, that being said, consumers are either too lazy or too gullible to get the full information. Although it is true that the decision lies on the consumer themselves, consumers must realize that marketers have a limited fiduciary duty. Laptops aren't going anywhere. It is way way too early to speculate that the Ipad will be revolutionary. Let's look back 6 months from now to determine if netbooks met its doom by the Ipad.

Let me answer that question for you, it's not. It's just an apple made tablet which is apparently a bigger iPod touch with a 1024x768 screen that functions as an eBook reader in color, gaming similar to what you can get with most PC's and a work experience customized for the office. Let's not forget that you can listen to music with this, but if you're trying to find a pocket to put the iPad in, good luck? You'll need a customized pocket just for the iPad. :P

I don't think the iPad is that revolutionary but when Apple slaps it's name on a product that was introduced in 2001 then you know that tablets are going to be the craze and manufactures are going to try to top the iPad any way possible.

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I think there is something else that we are missing because of our background, interests, and hobbies. When Apple designs something, they are mainly doing it for the mass consumer. The product has to be something that is useful and easy to use. I think that this is another part of their success. It is called good design. That is why a lot of people can find this device useful.

As for us tech guys, we have higher demands/standards. But the thing is that Apple isn't trying to sell something like the iPad to us.

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