As expectation builds that Apple will soon announce a new version of its original iPad, one financial house projects the overall tablet market will become a $35 billion business by 2012, with more than a third of the devices reducing demand for netbook and notebook PCs.
“We expect tablets to have an increasingly negative impact on PC shipments,” JPMorgan Securities analyst Mark Moskowitz told Reuters Monday. More than 35 percent of the tablets will cannibalize the market for low-cost netbooks and notebook computers.
The analyst raised 2011 tablet revenue projections to $26.1 billion, up from $24.9 billion. He also nudged his 2012 revenue forecast to $35.2 billion, up from $34.1 billion, when Moskowitz sees 79.6 million tablets shipping.
Although Apple now enjoys a dominant position in the market, the financial house sees a larger number of competitors, fueled by better operating systems and increasing inroads into the business and education sectors. As a result of more options during the later half of 2011, Apple may be forced to lower iPad pricing, according to JPMorgan.
This is just the latest sign of maturity in the tablet market. Obviously, the iOS system – as was done in smartphones – will be challenged by a tablet version of Google’s Android operating system. While more tablets may be brought to the market, it is yet to be seen how many will survive.
[Reuters]
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
8 responses to “JPMorgan: Tablet Market to Hit $35B By 2012, Cannibalize Netbooks and Notebooks”
I must say that this is some poor quality writing by JPMorgan. It’s an effort to give the readers what they want to hear, but it’s completely inaccurate.
Yes, iPad sales are “eating” away at sales of notebooks and netbooks. It is not however “cannibalizing” anything. To do so would imply that it is redirecting some form of its own sales. Apple doesn’t sell netbooks and it doesn’t sell notebook computers that compete on the level of iPad. Neither in function nor price. Apple has created a strategic position to carve out its own niche for a product that meets a need similar to that of a netbook. It hasn’t sacrificed iPod sales, it hasn’t sacrificed laptop sales. It’s not a “cannibal” or some other form of sensationalized threat, it’s just a competitive alternative.
“As a result of more options during the later half of 2011, Apple may be forced to lower iPad pricing, according to JPMorgan.” This statement calls the entire article into question. It will never happen. When has Apple ever lowered a price due to price competition? I can’t think of any. They don’t follow that model. They would rather raise the user experience to a higher level and pitch that than lowering the price tag. And why would they? They’re proving every day that people are willing to pay the price for it. None of the other proposed tablets have come close to Apple’s current price point. Perhaps after carrier subsidization. Apple bought up all the touch screens and competitors are scrambling to get something that comes even close. Undoubtedly cheaper alternatives will crop up but that isn’t Apple’s business to compete on that level and to imply they would just shows ignorance.
Sorry for the rant, it’s just articles like these bug me. It’s clearly hype for the sake of hype. Sensationalized headlines and rhetoric with clearly no research or thought involved.
Instead of, “Hey, has that headline pic been photoshopped?”, it deserves, “Now that is the shittiest PS job I’ve seen in a long, long time.”
No wonder your site has been downgraded. ;)
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With the iPad storage capacity is so small (16GB); it is a nice device for media consumption but hardly a replacement for notebook personal computing power and capability (100GB).   iPad will be an addition device for people who can afford it. After a year of holding stuff in the iPad, people will realize with the big “oh sh*t” moment that they need another computer (notebook/desktop) to offload files. Of course, Apple and other would pray for people to use the cloude for storage but I am sure no one would put their personal data in the cloud that some hacker and criminals can just roaming around and look for important thing to steal while a sub $500 notebook computer with ext storage can store their digital junk into eternity without any fear. Â