Lies, damned lies, and statistics. A really annoying overused catchphrase which sadly happens to be an adequate description of a story which appeared on Fortune’s website, in which a Morgan Stanley report is quoted as saying that the introduction of tablet computers – the iPad specifically – have caused netbook sales to plummet. It seems like the researcher in question, however, needs to learn how to read her own graphs.
The story has been making its way all across the internet, so I figured we should pay some attention to it as well. Morgan Stanley’s Katy Huberty issued a proprietary report to clients this morning in which she studies the impact of HP’s acquisition of Palm. In the report, she states that if HP were to build a tablet running the webOS, it could capture 15% of the tablet market – a market which, at this point, is totally owned by the iPad and the Joo Joo.
Also in the report, Huberty has a chart which shows the decline in netbook sales growth per month, year-over-year. The chart shows that year-over-year, the sales growth of netbooks is on a steady decline. In July 2009, netbook sales increased by a staggering 641% compared to the same month a year earlier. This is the kind of idiotic growth that’s simply unsustainable.
From July 2009 onwards, the sales growth of netbooks has been declining – note, however, that sales are still growing, only at a more comfortable, less hype-like pace. The explanation for this is pretty simple: back in 2008, the netbook was still a new phenomenon (the first netbook in the sense that we know them, the Asus EeePC 700 series, was launched in late 2007), mostly restricted to geek milieus such as, well myself. As with any new and widely popular product, initial sales growth will be astonishing as the market seeks to saturate itself.
The graph shows that the decline in sales growth for netbook started in Septmeber 2009, after which sales growth rose a little again in anticipation for the holiday season, only to continue its decline afterwards. Year-over-year unit sales growth in April of this year was still 5%, however, meaning that more netbooks were sold this April than during the same month last year.
Huberty’s conclusion, therefore, is flawed. She concludes in the report that the launch of the iPad, as well as the anticipated arrival of competing tablets, have caused a dent in netbook sales, starting in Januay when the iPad was unveiled, taking another hit in April when the iPad was launched.
As anyone with basic graph reading skills can see, this is just plain wrong. Not only did the decline in sales growth for netbooks start far ahead of the unveiling of the iPad (five months, to be exact), still more netbooks were sold after the unveiling and launch of the iPad than during the same period last year. On top of that, the decline in and of itself is also perfectly understandable – markets get saturated.
That is not to say the iPad hasn’t impacted sales – it most likely has, considering how relatively similar the two devices’ intended function sets are. However, to conclude, as Fortune does, that netbooks sales are being “gobbled up” is not supported by this particular dataset. We’ll need more data spanning a longer time-period.
The netbook market hasn’t really change since my last comment on osnews http://www.osnews.com/permalink?330245
Using a smart phone (iphone) and a 15.4″ laptop leaves no place for an over-priced low-end machined (netbook) The price range $200 to $500 is an overkill for an atom CPU that doesn’t do anything beside googling and email and few gigs of storage that can barely store two movies.
Edited 2010-05-06 19:56 UTC
That is a totally true evaluation if you already have a laptop. But for those who have a desktop, a netbook is a good little device.
I have a 27″ iMac and an iPhone, and love my netbook (running OSX of course). I take it to class with me every day, use it on the patio and porch, and plop down in front of TV and do some emailing and surfing while watching TV.
Drop a 16GB or 32GB SD card in it and I have all the movies I need for traveling with it.
The netbook does everything I need it to do at an amazing size, portability, and price point. If I need more horsepower, I use the desktop, if i want even more portability, I use the iPhone.
For me, the iPad is the odd man out. It fills no need that I currently cannot do better (and cheaper) with my iPhone/Netbook combo.
Edited 2010-05-06 20:27 UTC
I agree with some of that, but I think three of the largest attractions for netbooks were their portability, battery life, and price, none of which is typical of your average notebook up until recently. My theory is that the netbook market is being cannibalized by the CULV notebooks which share these qualities.
For the last half year, you could get CULVs in screens sizes 11″-15″ with battery lives up to 12 hours, a worthy match for even the most battery-conscious netbooks. Some of the popular CULV product lineups such as Asus UL and Acer Timeline are reasonably priced as well (starting at $500ish). The Intel SU series processors that most of them use wipe the floor with netbooks and their Atom processors. Also, their gains in popularity are well correlated with the drop in netbook growth (as presented by the article).
As a sibling poster said, the target market are those people who want to do some low-medium intensity computing while watching some TV. I would take a CULV notebook over some desktop-replacement behemoth in a flash for purpose.
A few gigs of storage? Hmm, guess that 250 gb drive in my Asus 1005PE is a figment of my imagination then, and so are the three TV seasons and 15 movies I have stored there, not to mention my 20 gigs of music and my 40 gigs of audiobooks. No, there’s just no room on that at all… To add to that, it’s a nice 10-inch form factor (perfect size) and easily gets a good 12 hours of battery. Oh, and it actually has a keyboard unlike the iPad, and don’t get me started about virtual keyboards. The cost? $371 USD. Cheapest iPad? $499 USD and it only has a few gigs of storage (16 to be exact) that I could only fit a few movies on. Funny thing there… Oh not to mention the webcam and microphone both, coincidentally, lacking on the iPad. NO, clearly I should ditch the netbook for the more expensive and less capable iPad.
Thank you for that.
I still maintain that the iPad is merely a large-screen iPod touch (of which I own an 8GB model) and as such is an unwieldy and unnecessary device. It’s too big to pocket, too fragile to bang around in a backpack, and does less than the most basic netbook.
I do like most Apple products but I think the iPad was a mistake, no matter what the pundits say. It will make them some money from the die-hard Apple gadget freaks, but I can’t see it being sustainable for more than a year or two.
Of course, by then they may be able to make a netbook-format machine that will pass Steve Jobs’ scrutiny (i.e. not suck).
Speak for yourself!!
I love my tiny EeePC 901. Perfect couch/bed computer. Small robust (SSD) and long battery life.
And it can do everything I need and only cost me 250€ over a year ago. A notebook is too fragile, heavy and annoying on the couch or in bed.
And I really don’t see how a big Ipod touch could replace that in any way. My netbook dominates the Ipad in every respect that matters to me.
That’s utterly crap – I just bought an Asus 1201n, and it’s brilliant. Now I’m selling my “old” laptop (Vostro 1400 with a T9300 CPU and Nvidia GS 8400).
The 1201n can play HD content (720p & 1080p) without breaking a sweat. I can even output it to my 40 inch TV through its HDMI port. NWN2 plays fine at native resolution with above average graphics settings. I already have a wireless keyboard/mouse combo, so I can do some gaming laying in my hammock
I also travel a lot on my motorbike to explore this beautiful country (Vietnam). I used to haul my Vostro around, but it was just too heavy for that. The 1201n is just the right form factor for me… It’s beautiful, 12 inch (1368×768) screen is just perfect, and I can barely feel it’s weight in my backpack. The 4-5 hours battery life is decent.
Comes with Windows 7 professional installed on its 250Gb HDD. I’m a linux guy (Arch) and I planned on making it dual boot, but I just can’t bother. Win7 is rather decent and it flies on this system (dual core Atom 330 cpu). So yes, your information and your post is rather outdated. I was looking for something like this for a long time, but almost all of the CULVs I found at this price point (490$) here had intel graphics – so for me, it’s the perfect machine. I’m going to buy a desktop pc though for some HD content editing and other heavier stuff…
Yeah, way to speak for everyone on the planet.
I own a smartphone, and my main machine is a 15″ laptop. There are pleanty of times i want to look something up, or really quickly VNC into a computer, or write an email on a semi qwetry outside in my backyard.
Yes i could unhook my laptop from it’s backup drive, extra 23″ display and take it outside and my audio recording gear, but that’s what the ipad is for.
my wife loves to look up recipes on it. I watch mythbusters on it before i go to sleep (streaming of course) email, and VNC on it mostly, apart from showing people photo’s and surfing the web. VNC is INFINITELY more useful on the ipad’s screen, so is web surfing in general.
although i have fit about 9 full length movies on it, along with 7 gb of music. 90% of the video i view is streamed however.
So for me, this thing makes sense. If it doesn’t for you, cause you like to take your 15″ laptop with you everywhere, that’s cool too. Just don’t assume everyone thinks the way you do.
The “mainstream online media” is filled with apple “enthusiasts” and they usually approach any news of any product with apple’s bias and exaggerations are so common now, they should be expected.
news are almost always looked at from apple’s device perspective and a critical eye is usually used when speaking of other devices and apologetic/fanboyish eye when looking at apple devices.
It doesnt matter how much data will be gathered, if the storycant be spined in apple way, no story will be written about it.
It’s easy to believe that tablets will hurt the netbook market badly, even if this set of statistics doesn’t yet prove it. I bet people that have a full-size computer that they use regularly are more likely to buy a tablet rather than a netbook. Tablet is just a more fun, book-like form factor.
BTW, I played with iPad today. It’s a great little device in a highly attractive form factor; once you try it, you’ll probably want to buy one.
Minireview:
– Virtual keyboard sucks. I’m much faster and more comfortabe with my phone keyboard (n900)
– iPhone apps on it are a bit worthless. They are really “zoomed in”, i.e. text just becomes bigger so that the font looks crappy and blurry.
Despite this, there is an addictive “magical” quality about the flat structure that makes it alluring. I’m looking forward to upcoming devices that address the main shortcoming (Apple).
You are absolutely right. Although I’m sure the iPad isn’t the sole reason for the drop in netbook sales, I’m sure it isn’t helping any either
As for me, I pretty much live on a PC (desktop). But if I wanted something to surf the web on (or whatever) while kicked back in my recliner watching TV, I’d rather have a tablet in my hand and just use my finger for navigation than to have a netbook in my lap trying to navigate with a shitty trackpad, or with the thing on a TV tray. There’s also smartphones for that, but I suppose it depends if you really want to play on a screen that’s 3x smaller than a tablet.
Likewise, if I was going on a road trip and wanted a computing device to carry with me, think I’d rather bring a tablet (assuming my usage was going to be light) than lug around a netbook with an extra mouse. In short:
– Desktops/laptops: For getting real work done
– Netbooks: For getting work done on a machine that requires less horsepower than a desktop/laptop
– Tablets: For play around the house or on long road trips, and a PC for your computer-illiterate parents
– Smartphones: For a phone and a PDA anywhere you are
Edited 2010-05-06 22:01 UTC
I sometimes feel that if you are in mainstream and pretty popular, then you have to suck Apple’s iDick. Sorry for sounding harsh and abusive, but this is reality.
Many columnists feel that reviewing Apple products can get them better viewership as Apple fanboys will throng the websites and exclaim “Oh! Shiny”. This would sound like the columnists know what people actually want.
The way Apple invites editorials and blog writers in it’s exclusive pre-release review programme, the chances that any reviewer will write against Apple gadgets is pretty less.
No one wants to be left behind in reviewing them
Your going to tell me on OSnews.com that there all apple biased posts?
I haven’t been here in a few months, but when did they start serving the cool-aid? This is among the most bigoted sites out there.
mtzmtulivu: you a hypocrite. And there are pleanty of stories, where the story, is Apple is evil, apple is closed, apple is trying to destroy the internet. Just like the apple fan boys did in the early 90s with Microsoft.
the difference? Windows mobile blows and the iPhone is a great piece of tech.
I just don’t get why, if your a zealot, admitted or not, Why you can’t use your zune and get on with it? not post about stuff you don’t know about?
like do you really know the “mainstream media is filled with apple enthusiasts”? No, you just spout.
I agree with you about windows mobile, but I don’t know to what extent the iPhone is “a great piece of tech”.
Sure, it’s great if you’re making the way for dictatorship in the future. Otherwise, it’s essentially some outdated technology and company policy with a nice UI on top of it.
When me and my brother were younger, my father wouldn’t buy us a gaming console because he thought that on a regular computer, at least, we were able to do something constructive. Now that I understand, I think that I won’t buy iThings-like devices to my children for exactly the same reason. If they want those, they’ll have to save money for them.
On a regular computer, you can work, create beautiful images, write physics simulations, make a film, type reasonably long articles and publish them on the internet, and so on. Can you do something like that on an iDevice ? What can these things do, besides being a new layer of consumerism that allows you to beautifully lose your precious lifetime instead of doing something useful ?
And this is not pure Apple hatred. Android is no better. In fact, Windows 7 sounds theoretically like the only useful option on a tablet… Except that technically it’s a joke too, because software is not adapted when running on top of a touch device. At the moment, there is no serious tablet, AFAIK.
Edited 2010-05-07 23:59 UTC
i do not see osnews as bias against anybody and that is why i post here.
can you care to explain i am a hypocrite? i do not own a zune, i do not own any window’s phone, i do not own any idevice and i use linux as my main and only system and i was in african in the 80s and 90s and have no emotional attachment to either apple or microsoft, where is my hypocrasy coming from? how did i come across as a hypocrite? care to explain?
you have been here in a few months you said, been here since 2006 i think and i know this place better than you
with all due respect, you can do better than making assumptions about somebody you dont know and then start attacking them based on assumption you just make ..they call it a “straw man argument” .. i made a comment about media bias ..microsoft, iphones, zunes, windows phones from you are nothing poor ability on your part to stay on topic and ending up creating “straw man arguments” ..how old are you? if you dont mind me asking
1. I just bought a nice MSI Wind 12.1-inch, Athlon Neo X2 netbook. Yes, it cost me $479. But for this price, I have a 1366×768 small, light laptop that has enough horsepower for anything I need, and even does HD Video well – it has HDMI out. Netbooks are not dead. There is no way I would want to do the kind of mobile computing I do (I’m a developer) on a MaxiPad. Larger laptops usually do not have enough battery life (I get 4-5 hours), or they cost too much. The market is definitely there.
2. If you keep using logic, you may have your journalist license revoked.
Why is that a netbook, and not a small notebook?
A netbook is a small laptop.
‘Cause it says Netbook on the box! I do get your point. It probably is just semantics at this point. In reality, the very presence of netbooks has caused the lower end of the laptop market to open up. A small form-factor notebook like what I have would have been very, very expensive 5 years ago (think of the Sony small laptops). By slightly bumping up the size of Netbooks (7″ to 8.9″ to 10″ to 12″), a new category of relatively powerful, cheap, light-weight laptops with good batteries has emerged. I don’t care if they call them CarrotTops, I like ’em!
Well it lacks a dvd drive and has a cpu designed for portability.
But I still agree with your comment since netbook should refer to a device that is designed to surf the net. They should call these ultra-portables or mini notebooks. But netbook is kind of a buzz word that isn’t going away.
Jobs promised that the iPad would save the press and make people pay for contents. I don’t really see anything from the mainstream press about the iPad as objective journalism.
You have to look harder. I rode an article about it in Le Monde about 2 months ago…
Wow… This is the kind of reasoning that leads into believing that endless divergent economic exponential/power growth is possible and into caring about growth derivatives rather than capital consumption. Economist spotted.
(Hint : mathematically, this means that in many years, netbook will reach close to infinite negative sales. You can’t fit data with finite-order polynomials forever).
Edited 2010-05-07 09:37 UTC
She’s reporting the negative slope trend of the market in terms of being a growth market verus mature versus declining.
The trend is that the market is reaching the concave down peak and unless their is some great change you won’t see a third degree polynomial that shows that peak point as just a transition point [saddle point] going up.
She’s reporting the negative slope trend of the market in terms of being a growth market verus mature versus declining.
The trend is that the market is reaching the concave down peak and unless their is some great change you won’t see a third degree polynomial that shows that peak point as just a transition point [saddle point] going up.
It still doesn’t support her conclusion. Netbook market growth could slow to 0% and still far outpace iPad sales. That hardly means being “gobbled up”.
Apple always claims that their products as revolutionary, super awesome, whatever. It is only marketing (or hot air, if you will).
I remember when the released the Macbook Air. What a big craze that was… And how many have I seen in real life since? Not a single one.
Apple does have some very successful products, like the Macbook, the Iphone and the Ipod.
But I have a strong feeling in my guts that this Ipad thingy will remain a niche player like the Air…
Edited 2010-05-06 21:12 UTC
Just finished reading this, its at the top of hacker news atm http://chucksblog.emc.com/chucks_blog/2010/05/what-ipads-did-to-my-…
Quote from that article:
Now, you can all start yelling how his case is untypical, or why it wouldn’t apply to you, or whatever.
Or, you can accept that yes, tablets are a nifty “new” product that we’ll all end up having sooner or later. It moves the economy forward and creates interesting buzz in tech industry, why should we be complaining? (except, of course, about the first entry to this new wave of tablets coming from Apple).
I can yell that the Wii caused the same kind of starry-eyed comments. Everybody was talking about it. Now I never hear a peep about the Wii from any of these people – it’s just there collecting dust.
In the meantime, people that bought a PS3 or Xbox 360 – you know, the traditional console players – are still using their consoles on a daily basis, buying loads of games.
Last time I checked Wii games still dominated the games sales.
See: http://www.vgchartz.com/weekly.php
You don’t get it.
There are a few Wii games that have been selling well. However, Wii owners buy far less games per console than Xbox360/PS3 owners.
Now guess what is more profitable in the long run: people buying lots of games every year, or people buying one console and only a few games per year. The issue here is that while Nintendo has sold a gazillion more consoles, game sales do not reflect that. This means that Nintendo’s profits per console are incredibly low compared to the other two.
I don’t understand how this example is relevant to the discussion. Hardware (tablet/netbook) sales is what’s interesting here, right?
You may be right regarding the point that Wii owners buy less games. It’s definitely wrong, though, that the Wii is just collecting dust after once bought years ago. Even after years since the Wii arrived it’s still dominating the weekly game sales (estimated 26.1% vs. 12.2% of the X360).
I think that’s not really the point here, though. In my view the Wii changed the game market. Sure, not for everyone, but it changed the market in a way that it reaches more people than before and that companies are looking for new ways to control games. And it got quite normal to play motion based games. And as mentioned before that wasn’t just a short trend. (and I think you wanted to make a point here)
Tablets could change the market in a similar way. It could reach new people, it can get quite normal to use it instead of a pc. Like the Wii, it won’t work for everyone, but at least ideas of a tablet will reach other areas. Look at netbooks with touchscreens for example.
This isn’t quite an accurate picture of things for a number of reasons, most notably that both Sony and Microsoft sell the console itself at a relatively significant loss, and as such *have* to sell lots of games in order to break even, let alone profit. This isn’t the case for Nintendo (they’ve always engineered their consoles such that they could be sold at a profit), and they aren’t exactly doing badly as far as first-party game sales go either (see the ridiculous numbers for New Super Mario Wii for instance), which is why their yearly profit numbers are astronomical compared to the other two.
Edited 2010-05-07 16:34 UTC
Wii is used to run games; an expendable community that gets old fast.
Tablets are used for internet, which “keeps on giving”.
Some differences and similarities;
1) The xbox and ps3 are fighting for the same market. The Wii created a completely new market, that was a heck of a lot larger then the traditional one. I think that is what Apple is banking on, not going after places or people that really need PCs, but creating a market with people who are using machines that are really inappropriate for their needs currently.
2) Wii owners don’t buy as many games, (but the games they do buy are published by nintendo, almost exclusively). iPhone owners on the other hand tend to buy way more apps then virtually any other computing platform. At least around where I live, obj-c is hands down the most marketable skill a programmer can have, and an app, any app, on the appstore will virtually guarantee them a decent job. I would say the iPhone trend would be closer to what ends up happening on the iPad, but we will see.
Tablets have been around for ages. Apple just got people to decide they wanted one.
The person buying the iPad is not the type to buy a netbook with Windows. From what I have seen the iPad is mostly being bought by Apple fans and does not have mainstream appeal like the iPhone.
Netbook sales are likely down because sales of a new type of product start high and then taper off as supply meets demand.
Sales will pick up as word gets around about how much battery life some of the newer models have. 8 hour battery life will bring in a lot of new customers. People that have jobs that require traveling will snap these up.
Statistics slightly differ from people thinking the iPad is bought only from apple fans. Although other apple products help selling it for sure, many buyers are windows users not even having an iPhone. Don’t forget it’s mostly a new market.
source (for example): http://www.neowin.net/news/more-than-half-of-ipad-buyers-run-window…
Referring to the article:
Although I definitely think tablets will be the new trend forcing falling sales in the netbook market, I don’t think the iPad has any significant effect on it due to it only having a small (but profitable) portion of the hole market. (like any apple product)
I said mostly, not only and that poll shows that most of the buyers have a machine with OSX. This is significant given that Windows users vastly outnumber OSX users, especially internationally.
I think the idea that the iPad is a fad is a joke. I have never bought an apple product before and I already have two iPads. It is a great device to use when watching tv or moving around the house. All my friends that have seen mine have rushed out and bought one too. Yes its a big iPod touch but the screen size makes all the difference. The net on a tiny screen just sucks and typing on a touch is too small. The iPad is as durable as a netbook, maybe more so when put in a case. I truely belive that tablets will kill the netbook market..which is a good thing since they are just shitty little laptops.
Edited 2010-05-07 17:43 UTC
People like you amuse me. Tablets have been sold for ages, but now that Apple makes them, everyone wants one.
I dont think it is that much to do with Apple. I think its just that technology has got to a point where tablets are actually useful.. Such as multitouch, small fast processors, LED backlighting, Wireless, Battery life, etc. I wouldnt care who made the iPad, its a very useful alternative to a laptop.
I think the other reason is that the iPad, as well as future Android tablets, have an os and apps designed for them. Before this, the majority of tablets were simply a desktop os slapped on to a touch screen and sometimes pen input. The experience was just awful with such a combination, as even if the os was altered a little for touch, none of the applications were.
Meh. Anyone know if Goldman-Sachs is shorting netbook makers? Could explain her mis-reading of her own chart…
Edited 2010-05-07 20:40 UTC
First off, I feel sorry for the people dumb enough to think they could trust magazines like Forbes or Fortune for tech advice – given that their writers are typically some of the least technically minded people out there and get even the smallest details of any tech story completely wrong… Getting a technical opinion from a writer at Fortune is like getting automotive advice from B-L, tactical advice from Sir Douglas Haig, or boat building advice from King Gustavus Adolphus.
In this case you have to look at the intent of the article – the iPad is being poo-poo’d by just about every SERIOUS tech writer there is, while Fortune is all about finances. Frankly Apple is a financial media darling given their over the top profits stemming from the completely absurd product markup and Steve-O’s reality distortion field. Naturally a writer from Fortune is going to use every propaganda trick in the book to try and paint a rosy picture of Apple at the cost of everyone else to drive investor speculation – even when it’s flat out lies through the use of assertion, card stacking, bandwagon, plain folks, simplification, transfer, etc, etc, etc…
But really the heart of this is the same statistical double-speak as I was pointing out just a few months ago with the whole “there are less IE users, the percentages say so” bull. Your FLOSS Zealots and anti-corporate fringe whacko’s trying to use IE’s “drop” to 54% share of the market to say IE is dropping in relevance – when the size of the market has more than doubled since their 90%+ peak. When the size of the pool changes, share percentages lose their meaning. Over the period of time IE dropped from 90% of the market to 54% they’ve GAINED 300 million PLUS new users… and that’s before we point out things like FF prefech possibly artificially inflating it’s numbers 40% or more, technical minded users (the types likely to use alternative browsers) are often counted more than once (I myself being counted five times for Opera on home desktop, work desktop, garage workstation, laptop and netbook), etc, etc, etc…
Card stacking – presenting only the factual data that supports one viewpoint without presenting the entire story; particularly the parts that contradict the viewpoint.
It is clear as crystal to those who know the common propaganda techniques that the writer of that article started out with their own opinion, then tried to shoehorn the facts to fit it – instead of the scientific approach of looking at the data, forming a theory and testing the theory to see if it fits the data.
Edited 2010-05-08 22:43 UTC