The iPad is selling really, really well right now. And it’s not a complete surprise. It’s one of the cheapest, easiest to use tablet computers ever to hit the market. It won’t be the last, and there’s a chance that by this time next year a dozen Android, WebOS, or Windows 7 tablets could be fighting with the iPad for dominance in this space.

But does that mean that the iPad is crushing other product categories, such as netbooks? Maybe, maybe not. There’s certainly some overlap in audience. Netbooks are cheap computers, often with long battery life, which many people purchase primarily for surfing the web on the go or on the couch. The Apple iPad is pretty good at those things too.

But netbooks have keyboards, run Windows apps, and are generally just small PCs. And iPad isn’t.

So when Digitimes reported this morning that Asus is adjusting its third quarter netbook shipment targets, in response to the iPad… I got a little skeptical. I think the reason the targets are changing is simple: Asus is shipping fewer netbooks. But is it because of the iPad?

If we lived in a vacuum and the only two products you could choose from were Asus netbooks and the Apple iPad, then it might not be that hard to find an answer. But even if that were the case, there’s another factor to consider. Asus has been selling netbooks since 2007, while the iPad has only been available for a few months. It’s possible that one of the reasons netbook sales are slowing is because many of the people who want one have already bought one. Until it breaks or something truly revolutionary comes along to convince them to purchase a new netbook, they’ll probably hang onto the computer they spent a few hundred bucks on last year.

But we don’t live in a vacuum, and it’s not just the iPad and Asus netbooks. There are 10 inch notebooks from Acer, HP, Dell, and a dozen other companies competing with Asus on the netbook front. What’s more, there are a growing number of 11.6 inch and 12.1 inch notebooks which are bigger, more powerful, and have higher resolution displays than netbooks — but which don’t weight much more, get similar battery life, and are still selling for around $500. I think it’s just as likely that these notebooks are eating into netbook sales as it is that the iPad is.

Of course, Asus and other companies are hedging their bets. Pretty much every major PC makers is expected to launch some form of tablet computer in the next year. And there’s a decent chance that some of them will actually sell pretty well. But it’s too early to say whether that means the netbook category is going to disappear altogether. It may shrink, due to a wider range of budget portable computers to choose from. But that’s a far cry from saying that the iPad killed the netbook star.

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17 replies on “Correlation is not causation: iPad may or may not be killing netbooks”

  1. At first, I was probably one of the more skeptical people when it came to the iPad, but now that I have had a chance to experiment with one and Stanford is giving them out to their students (i kid you not:, I have to admit that it does have a place in the market.

    Well it’s official: the iPad has redeemed itself 😛

  2. for weeks before the iPad was released we heard endless “it’s rubbish” comments from tech reviewers. then it comes out and sells out. and keeps breaking records.

    and then many who frowned on it actually bought one and grudgingly gave it some limited thumbs up.

    i’m sorry but anyone who thinks using something like this is “the worst web experience” should get a life. it is a joy to zip around pages using touch. the on screen keyboard is not bad and when you add a wireless keyboard it’s fantastic.

    i have 2 netbooks. as much as i’d love another, i’m not rushing in. why? well the battery life on the eeePC 701 and the Acer 150 are woeful. about an hour. that means they are emergency only items to use.

    OK so battery life has improved if you get a 6 cell and N450 processor. or so they say.

    with the iPad, i do get 10 hours of use. that’s what is great about it. it makes a fantastic reader – carrying around heaps of books, magazines and PDF manuals all the time makes it a joy to read them on.

    netbooks were cute, impulse buys. not really that practical in doing much. for most people, using an ipad on a wireless network to check emails or surf the net or watch videos (Air Video is a fantastic program that on the fly converts DivX and other formats to be iPad friendly). add in all the Apps and I’ve yet to really miss the netbooks.

    about the only friend i would recommend a netbook to is a someone with limited needs and who doesnt stray far from the power grid. writing a book and like to get outside? like to check a few emails? that sort of person. not need for multimedia or CD ripping.

    it’s crazy that all the manufacturers are suddenly wanting to launch tablets. they can’t just throw Win7 on it and hope. there are going to be some horror stories in a few months time when these come out… by which time Apple will have upgraded to version 2 and still be ahead of the pack AND with a proven sales and environment model that works.

    1. You know those people who come knocking on your door trying to sell you on some religion? That’s why every “Apple” clone needs to identify themselves. It makes “your take” a bit more understandable.

      You said it yourself. You add a wireless keyboard and bingo! Yeah, then what you got? Yeah a netbook buddy. What’s the cost after adding a dock (which you didn’t mention) and the wireless keyboard? If you need a stand and keyboard, then obviously you’re using the device in a way that it wasn’t designed for. You want it to be a laptop? Go buy one.

      Most of the things you mention about surfing with touch are…. done with smartphones.

      I agree that it’s crazy everyone wanting to launch tablets. On that we agree. I lump iPad in with that. Talk to me in a year or two and lets see where it’s at then with tablets/iPads. What if Apple released a 10 or 11 inch laptop? Ah but they don’t need to because people have their iPads with wireless keyboards and tablet stands. Nice. I could buy about 3 ereaders for that price.

      In terms of netbooks, what is a netbook? This is also part of the “killing netbooks” argument that makes no sense. Asus call their line of Eee PC’s netbooks and that includes the 12.1″ version. When netbooks have dual core processors and graphic abilities, then what? Those aren’t netbook anymore? The 1201N is anything but gutless. So when they aren’t gutless in the near future what does that mean? Netbooks are dying but the 11.6 and 12.1″ non netbooks (thin and light, ultra thins) are going strong? Aren’t they all just glorified netbooks? Isn’t a netbook a secondary computer? Who wants a 12″ screen as their main home computer?

      I’m just saying tablets and iPads are killing what? Labels suck but how do we know what we are talking about if we didn’t label things?

  3. I don’t see the iPad as a netbook killer; esepecially since netbooks are getting bigger and better. With AMD and perhaps VIA entereing the netbook arena, things will improve for netbooks. I see the iPad – like other tablet pc’s – being used in conjunction to netbooks the same way netbooks are used in conjunction with notebook computers. There is no law saying you have to have only one computer and no one computer will ever truly fit all ones needs.

  4. The Ipad may well be crushing the traditional netbook market, of 10″ Atom devices utterly incapable of actual computing tasks.

    All they are is badly designed media-consuption devices, with a terrible UI and no built in sales portal like the Ipad.

    However, the ‘market’ for netbooks has shifted upwards to 11.6″ devices with proper dual-cores and DX10 integrated graphics.

    Atoms future lies in set-top-boxes, and this will become apparent when Fusion arrives.

  5. Heck, if netbooks are going to die I say — let them. Who cares? Liliputing will not be going anywhere any time soon! The pace of change in computing has always been rapid and if the market is going to completely kill off netbooks (which would be nearly impossible anyway) — then what is the problem?

    What is wrong with using an Ipod Touch-like device to power all of your computing needs? As ARM will be bringing this luxury to reality soon!

    To be able to run the internet and all of you computing needs, etc. on standard TVs (which are far more common in the developing world than computers, by the way), on regular computer monitors, on projectors, etc. using the juice of only a handheld device is nothing short of a blessing? And I certainly won’t be complaining if netbooks are relegated to the $30-a-pop bargain bin due to a change in trends.

    So what’s with the netbook extinction fears? Just let them die… Nobody will miss them if they go as the public will be busy purchasing something they deem to be better.

    Having said that, I personally don’t think that netbooks will be going anywhere. Especially when they finally hit the market in 12-inch sizes without a bezel!

    But why is there a preachy rush to save Intel-based netbooks?

  6. I’ll weigh in. The tablet invasion is the biggest farce I’ve ever seen in technology. Ever. I can’t dispute the iPad success. You should run a poll that asks, “Do you care about tablet computers”. Aside from page views that might be a reasonable indicator.

    The next year will see a disturbance in the force. Netbooks we can agree are stunted because of Intel. AMD will shake things up. Smartphones can do pretty much EVERYTHING that a tablet pc can do. Sure you get more real estate but who cares. Then you have netbooks and then you have the wannabee laptops that aren’t full powered but want to be netbooks without the cheap price tag. Oh don’t forget about ereaders also!! It’s all going to boil down. There are simply TOO MANY PORTABLE COMPUTER OPTIONS coming to market. It’s making me nauseous.

    We will see the influence newspapers and magazines have on consumers. If they have their way, we will all carry around tablets along with our smartphones!?! They see that as the savior to their industries.

    The only thing really killing netbooks is in fact Intel. It’s too much for too little and that’s that. They even boxed out Nvidia ION so that it can’t even do what its supposed to do. See you in court because Nvidia launched challenges to Intels practices. So blame lame processor upgrades for dwindling sales, not the iPad.

    The ipad is something unto itself. It’s consuming, not creation of content. You would still need a laptop/netbook because it has wider usage. I haven’t seen anyone with an iPad in a coffee joint yet, but when I do, I’m sure I’ll chuckle. Buy a netbook/laptop dood. Your back will thank you. I would be completely flabbergasted if consumers are deciding between a netbook or tablet when they have an iPhone 4 in their pocket. They might need to have every device, which is the tablet/iPad market as I see it. It’s for those people who don’t need to think, then can just do. They have the deeper pockets which replaces the need for decision making.

    In closing if the tablets threaten the netbook market, then you need to find some real solid proof of that. Intel wants the ultrathins to threaten the netbook market, not the tablet market. When the smartphones keep getting better and faster, doesn’t that in fact cut into the tablet market? Who’s cutting into who’s market? My brain hurts from all the options.

  7. Brad, another thing to consider is the fact that Netbook performance really hasn’t moved anywhere in the last few years, unless you count CULV or the new Nile based AMD processors, and most ‘books with those are trying NOT to have the word Net in front. All that’s improved really in the last year or two on the pure netbook front is battery life… And honestly after it passes a certain threshold that’s not a reason for someone to say ‘hey I need to upgrade’.

    If you had a Asus 1005H would you really toss it aside to move to a Asus 1001P because it lasts 2 more hours on a charge and is 2% more powerful?

    I see this being caused by 3 factors: By concentrating on power usage instead of performance, Intel is sort of killing it’s somewhat accidental and nascent netbook market, while trying to squeeze down into phones and MIDs. Specification restrictions: Whether is’ MS or Intel saying that netbooks won’t have a screen larger than x inches, with x amount of RAM… There’s very little ability to differentiate at similar price points. So netbooks are pretty much hitting the bottom of the pricing barrel, which is where we hit the 3rd issue. Once Manufacturers try to differentiate by breaking the mold and adding anything new and exciting, especially if it ups performance, no one wants to call it a netbook anymore, because that’s a marketing term that implies low cost, so it becomes a laptop…

    So yeah, netbooks aren’t selling as well as they used to, the market for low power atom based netbooks has been well served over the last few years. Oh well. That said, I’d be willing to bet that low cost thin and lights (I hate that term) are way up even with the iPad competing for dollars as people who wanted a modicum of performance start jumping into the low cost portable laptop market.

  8. I totally agree with Brad’s views on the situtation. To be honest many have aleady got themselves a Netbook and are not interested to get another one anytime soon.

    The market is already saturated with these and customers know that the new updates are not dramatic.

    The netbook manufacturers need to make a good marketing plans and sell what the customers want. Faster netbooks with a greater batterylive is in mind of every netbook customers so why not work on that.

  9. I agree, Apple’s marketing has a lot to do with the iPad’s success but it seems people want to exaggerate that success. People get netbooks because they are mini computers that are nicely portable and are cheap to get.

    The iPad is priced out of the netbook range and offers a different experience. So it’s comparing apples with oranges. Especially since many of these studies also don’t show how many iPad buyers also have a netbook and how they get used differently.

    The thing is the netbook market has simply become saturated, most people already have netbooks that are going to get them and newer models don’t offer much to prompt people to upgrade and there aren’t any new companies getting into netbooks to further expand the playing field. So of course netbooks would be advancing at a slower rate now.

    Sure some people may get an iPad rather than a netbook but those people are few and didn’t really need a netbook in the first place. Rather they just primarily wanted a luxury product to consume their media content and for that the iPad fits their needs.

  10. well it makes sense that the sales of netbooks are starting to decline if you use an average replacement rate of three years for laptop computers [which is generally correct according to my understanding] [07-10]. The axiom that correlation does not apply causation is really apt here.

  11. There seems to be this unwritten interest in denying that netbook sales are not negatively impacted by iPad sales. There is definitely some segment of the netbook market that purchased netbooks (pre-iPad availability) because netbooks were the closest thing that suited their needs at that point in time. Netbooks weren’t perfect for their needs but they were the closest things available.

    Now with the availability of the iPad, for some, the iPad is a better fit than netbooks were. Those people (and future ones in the same category) will buy iPads instead of netbooks. That WILL have an effect on netbook sales.

  12. Waiting for Pixel Qi to show up as a $50 option on netbooks… I am. So, maybe others are too?

    Also wanted is 12-18 hours of battery use per charge, Gorilla Glass screens, capacitive touchscreen on netbooks too, Android or Chrome OS options etc.

  13. I’ve noticed that most contributors who cover mobile technology don’t understand business at all. There are many, many, many sad people (many are my friends and clients) who buy things like towels and perfume because they have a BMW, Ferrari, or Porsche badge on it because they love BMW, Ferrari, or Porsche, even though they’re pretty crappy towels and perfume. Touchscreen slates are terrible devices in general, and the iPad is no exception. However, it sells because of the overwhelming marketing attack that Apple threatens customers with. NO ANALYSIS that I see reported on tech sites presents to back out the BRAND influence on the sales figure of the iPad. Without this adjustment, it’s USELESS AND MEANINGLESS to talk about.

    Brad, I have to take exception with your conlusion that the iPad is good at web browsing. I can’t think of a worse operating system and web browser combination than what the iPad offers, but maybe that’s just because I’ve used more than most and am immune to the Apple mind virus.

    Also, every so often the operating systems worlds branch out into “mobile and “non-mobile” versions in response to slow developments in hardware. That’s what Windows CE was about back in the day. That’s what ios4 and Android are about today. They’ll go away, and things will reform again.

    1. You are correct about not understanding business and alluding to BMW, Ferrari, and Porsche. The heart of the matter is that Apple is the only company in its industry with brand equity similar to well known expensive automobile manufacturers. This is not a mistake or a stroke of luck. Marketing exists for a reason and Apple appears to be the only company in its industry that realizes this. Competing mobile and computer manufacturers need to do a better job of integrating marketing plans into their strategic management process.

  14. I can understand your point. I have an HP 311, and I see it lasting me at least another 2 years. If not more barring some sort of incredible innovation, but I consider that very unlikely. Just doesn’t seem to be anything too much different coming in the pipeline.

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