Analyst: iPad Signals "End of the Mini-Note" Era

When Steve Jobs called the iPad a "magical" device, perhaps he was talking about the spell of destruction the iOS tablet has been casting on netbooks. Check it out -- according to market research firm DisplaySearch, in the second quarter of 2010, netbook/tablet PCs were down 4 percent on quarter, but up 29 percent on year. Doesn't sound so bad, right? But if it wasn't for the 3 million iPads shipped in the quarter, combined netbook and tablet PC shipments would have been down 14 percent on quarter and 13 percent on year. Maybe it's just a coincidence, or maybe the iPad really is cannibalizing netbook sales, even if Best Buy believes it's bad form to say so.

"The end of 2007 witnessed the launch of mini-notes. The first quarter of 2010 signaled the birth of the tablet PC, and possibly by extension, the beginning of the end of the mini-note market, especially in developed regions," said John Jacobs, director of Notebook Market Research. "Apple has leveraged its successful iPhone business model onto the iPad. More than 50 other brands have tablets in varying stages from development to mass production. Unlike the mini-note/netbook model, which was not much more than a low-cost, basic mobile PC based on the Wintel platform, the majority of tablets have, or will, choose a combination of next generation Intel Atom CPUs or ARM-based CPUs paired with a version of Android, or in the case of HP, webOS."

DisplaySearch notes that netbooks in the 8.9-inch and smaller category is all but a dead market, with shipments down 89 percent year-over-year in 2010. Things aren't quite as dire in the traditional 10.1-inch to 10.2-inch netbook sector, but still down overall (8 percent year-over-year).

DisplaySearch isn't the only entity seeing the trend. Back in September, a Best Buy exec told The Wall Street Journal that internal estimates showed the iPad cannibalizing sales from all laptop PCs, and especially netbooks (the executive's comments sent Best Buy's PR department into damage control mode, which promptly issued a statement saying his cannibalization numbers were "grossly exaggerated").

Whatever the real numbers might be, it's clear the iPad is at least having some effect on the number of netbooks sold, and it will be interesting to see how it all plays out once non-Apple tablets start to flood the market later this year and into 2011.