Study: iPad devouring netbook market and hurting Apple's other products

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Two research reports from financial services firm Morgan Stanley suggest the Apple iPad's success is mainly coming at the expense of the netbook market.

The iPad has sold more than a million units in the US since its launch a month ago, with Apple saying the tablet has outperformed even its most optimistic estimates. And if Morgan Stanley's figures are to be believed, the impact of that success has been felt most in the netbook and laptop markets.

With opinions divided on the viability of tablets in the long term, Morgan Stanley teamed up with its internal research team AlphaWise in the weeks leading up to the iPad's launch to determine the technology markets most under threat of “cannibalisation” by the Apple slate.

Consumers who had committed to buy the iPad were asked what they would otherwise have spent their money on, with 44 per cent identifying netbooks and laptops.

However, the study also revealed that the iPad's success isn't just hurting Apple's rivals – it's possibly undermining the company's own product lines too. More than half of those who would have invested in a laptop were it not for the iPad would have gone for an Apple laptop.

Furthermore, the iPad is also making a serious dent in iPod touch sales: the survey reveals 41 per cent were choosing the iPad over its smaller screened cousin.

The other markets highlighted as being at risk of cannibalisation are eReaders (28 per cent), desktop computers (27 per cent) and handheld gaming devices (17 per cent).

Critics may question the validity of a study conducted before the iPad even hit the market, but Morgan Stanley's Katy Huberty – who included the figures in a report to clients – argued that other market data suggested the iPad's impact had in fact been even greater than the initial study suggested.

Huberty pointed to separate research conducted in conjunction with NPD showing netbook sales growth took a dramatic hit in January, then again in April, suggesting the initial drop coincided with the iPad's unveiling by Apple boss Steve Jobs, and the second with the device going on sale. At present, year-on-year growth of the netbook market has fallen to single figures, a far cry from its peak of 641 per cent just one year ago.

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