iPad Killing Off Netbooks? Numbers Don’t Tell Whole Story

Over on CNNMoney/Fortune’s tech blog, there’s a conversation going on about a report released by Morgan Stanley’s Katy Huberty claiming that the iPad is “gobbling up” netbook sales. It’s also “Cannibalizing” sales of the iPod touch, eReaders, desktop PCs, notebooks, and handheld video game systems. Essentially, the iPad will eat every other kind of electronics except phones, which the iPhone is probably devouring in its gluttonous greed. Or, maybe not. First, I have some serious issues with the data as presented. Take the chart above, for instance. YoY stands for Year over Year growth. So it essentially shows the growth of netbook sales based on the year before at the same time. See how it peaks in July? Now look at how small the bar is in April. WOE.

“[Netbook sales] fell off a cliff in January and shrank again in April — collateral damage, according to Huberty, from the January introduction and April launch of the iPad.”

Yeah… or maybe something else is going on. First, this chart does not actually show netbook sales, it shows sales growth. That’s an important distinction. And, as Brad Linder of Liliputing points out, of course there was far more growth in the summer of 2009 compared to 2008, as there were far more netbooks on the market at that time. Also, the falloff not highlighted in the blog post — between September and October — coincides nicely with the end of spending for students returning to school. Yes, growth went back up for the holidays, but not as much as in the summer. In reality, netbook sales growth has been in decline for a while. Michael Gartenberg, analyst with the Altimeter Group, tweeted that the relationship people are drawing based on this data is “Reverse case post hoc ergo propter hoc.”  Further expanding on this, he said that it’s a bit of a stretch to draw the iPad cannibalization conclusion from the data presented. Just because netbook sales are down since January doesn’t mean the iPad was the cause. Gartenberg cites a “perfect storm” of manufacturer and consumer needs/desires that drove the explosive growth of netbooks, but says now this is dying down. Consumers may be unsatisfied with what netbooks have to offer in general, or they’re finding what they need in budget-friendly ultraportables, or there may other reasons why growth has slowed. But to lay it all at the feet of the iPad is just “bizarre.” Plus, today iSuppli Corp released a report that shows netbooks and ultra-low voltage ultraportables will continue to do well in 2010 and drive a 25.5% overall growth in notebook sales by the end of the year. Before pronouncing that the iPad has killed the netbook, let’s take a look at all of 2008′s actual sales data to see sales across all months. Plus, if people bought a netbook in 2008, why would they buy one again in 2009? I realize that companies love the kind of consumers who bought the first iPhone, then the iPhone 3G, then the iPhone 3GS for no other reason than wanting to have the newest toy, but that’s not going to happen with every kind of product. The writer of the report, Katy Huberty, bolsters her argument by citing a Morgan Stanley/Alphawise survey that shows 44% of U.S. consumers intended to buy an iPad instead of a netbook or notebook. First, I’d like to know if that means they intended to buy a notebook but changed their minds when they heard about the iPad or if they just want an iPad and not a notebook — two different stances. Second, I’m curious if those people are satisfied, in then end. Are you one of those consumers who were going to buy a netbook or notebook but changed your mind and bought an iPad, instead? Do you feel that the iPad is a sufficient substitute for the computer you were going to buy? Now that you own it, are you going to get a computer as well? I’d really like to know.