Apple trumpets iPad cannibalization

'If this is cannibalization, it feels pretty good,' says Apple COO about tablet's impact on laptop sales

Apple yesterday made its strongest statement yet that soaring iPad sales are affecting the laptop market, saying that the problem should concern its rivals.

"Was there any cannibalization by iPad?" Tim Cook, Apple's chief operating officer, said during a Tuesday earnings call with analysts. "Honestly, I don't know for sure. But yes, I think there is some cannibalization."

Apple sold 7.3 million iPads in the final quarter of 2010, more than two-and-a-half times the number of Mac laptops sold in the same period and almost double that of all Macs.

Last year, analysts debated the idea that iPad sales, and tablet sales generally, would cannibalize sales of notebooks and the even smaller, cheaper netbooks.

In May 2010, for example, Jeff Orr of ABI Research dismissed netbook cannibalization , while four months later, Stephen Baker of the NPD Group said it was too early to conclude that rising iPad sales and slowing netbook purchasing were connected.

More recently Gartner analyst Mikako Kitagawa said it was unclear whether cannibalization was taking place , arguing instead that people may instead be postponing upgrading their home machines, and spending the money on other things, including tablets or video game consoles.

Apple's Cook did not quantify notebook cannibalization, or even admit that it had affected the company's laptop sales.

Cook cited the strong sales of Apple's laptops last quarter to back up his point.

Sales of Apple's MacBook line increased by 37 per cent over the same quarter in 2009, fueled by the October introduction of a revamped MacBook Air. Apple's desktop and notebook sales combined to post a 23 per cent year-over-year growth rate, seven-to-eight times higher than the computer industry's average gains as projected by IDC (2.7%) and Gartner (3.1%).

"If this is cannibalization, it feels pretty good," said Cook yesterday.

Ezra Gottheil, an analyst with Technology Business Research, said cannibalization was part of Apple's strategy.

"There is cannibalization [of notebooks by the iPad]," Gottheil said yesterday in an interview after Apple revealed its record-setting fourth quarter numbers. "But Apple is intent to have that. They want people to be choosing between and among Apple products. The iPad also is the kind of product that when people buy one, they're more likely to later get a Mac."

According to Gottheil, Apple is trying to get consumers to think of their home as a place where there's just one personal computer -- likely a desktop -- in the house, which in turn is surrounded by multiple portable devices, whether those are smartphones, tablets or light-weight laptops.

Cook turned the tables on the cannibalization by claiming that the iPad generates a "halo" effect for the company's other wares. "As we've seen on the Mac by the iPod some years ago, I think there is a halo effect from Apple product to Apple product," he said.

The halo concept isn't new, of course. In May 2010, a month into the iPad launch, consumer analysts at a pair of firms attributed pops in Mac sales and usage to the publicity about the new tablet, and Apple's retail stores, where some customers checked out the tablet but left with a new notebook.

"I see more of a halo effect than cannibalization," said Brian Marshall of Gleacher & Co. yesterday.

In any case, Cook said competitors were the ones who should be worried about iPad sales, not Apple.

"If the iPad or tablets do cannibalize the PC market, keep in mind that we have low share of the PC market," Cook said, touting the Mac's low share as a benefit, not a disadvantage. "So the other guys lose a lot more, and we have a lot more to win."

And Apple isn't losing any sleep over potential cannibalization, Cook claimed.

"Honestly, cannibalization is not something that we are spending one minute on here," Cook said. "The iPad teams are building the best iPad for the future, and the Mac teams are building the best Mac, and I can tell you that both groups believe that they can continue to grow."

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags GartnerApplehardware systemslaptopsnetbooksNPDABI researchMacintoshBI Research

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Gregg Keizer

Computerworld (US)
Show Comments

Cool Tech

Breitling Superocean Heritage Chronographe 44

Learn more >

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?