PCs Getting Less Use at Small Businesses

A survey of 2,223 owners and managers at companies with less than 500 employees, most of them with between five and 499 workers, suggests that "PC" use is declining, while other digital devices, including tablets and smartphones are taking up the slack.

Beyond the finding that nine percent of business owners were using iPads (as of November 2010), the study found that 79 percent of small- and midsize-business owners used a desktop computer, down from 83 percent in 2010.

Some 16 percent used a netbook or notebook, down from 21 percent earlier in 2010.  About 60 percent used a laptop, down from 65 percent.

Note the trend: tablets up, desktop PCs, netbooks down, notebooks down.

About 37 percent used a smartphone or other personal digital assistant, up from 27 percent the prior year.

Fully 31 percent were using mobile applications, a category that wasn’t even measured the previous year, on smartphones, cell phones, or tablet computers.

What all of that might mean is that many business and work tasks really do not require much in the way of content creation, beyond replying to emails or social media messages.

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Where Do Tablets Fit in Computing Devices Spectrum?

Ever since the iPad launched, lots of us have been trying to figure out where the tablet device fits in the spectrum of computing devices. Nobody has trouble with iPods, though the iPod "touch" causes questions. People understand PCs, notebooks and even netbooks. People have no trouble figuring out where smartphones fit.

Tablets are harder to categorize. They seem to be "content consumption" devices, but it now appears that is the case both for business and consumer applications. Content consumption in the former case means access to email, instant messaging and other Web-based applications. In the latter case, though email is helpful, video and gaming seem to be the drivers.

But it probably won't be the case that tablets are clearly distinguishable by type of user or mode: business or consumer.

Deloitte predicts that in 2011 more than 50 percent of computing devices sold globally will not be PCs. While PC sales are likely to reach almost 400 million units, Deloitte’s estimate for combined sales of smartphones, tablets and non-PC netbooks is well over 400 million.

Unlike the 2009 netbook phenomenon, where buyers chose machines that were essentially less powerful versions of traditional PCs, the 2011 computing market will be dominated by devices that use different processing chips and operating systems than those used for PCs over the past 30 years.

Deloitte’s view is that traditional PCs will still be the workhorse computing platform for most of the globe in 2011. PC unit sales are expected to rise by more than 15 percent year-over-year, and the global installed base of PCs stands at over 1.5 billion units. At the end of 2011, non-PC computers will still represent only about 25 percent of all computing devices.

However, when looking at the future of computing devices, 2011 may well mark the tipping point as we move from a world of mostly standardized PC-like devices, containing standardized chips and software, to a far more heterogeneous environment.

In 2011, buyers of computing functionality, whether in the enterprise or consumer sector, will face some interesting choices. In this new era where more than half of all new computing devices sold are non-PCs, the ranges of price, performance, form factor and other variable will be at least an order of magnitude wider. Choosing will take longer, and will need to be done more carefully.

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Netbook Demand Seems Weaker: Issue is Why

A ChangeWave survey of 3,108 consumers during October suggests essentially-flat demand for desktop PCs, unchanged levels of demand for laptops and lower demand for netbooks. Most observers will be quick to point to stronger demand for tablet devices as the reason for the lower interest in netbooks.

The percentage of respondents saying they plan on buying a desktop over the next 90 days (six percent of respondents) has ticked up one point since ChangeWave's survey in August, while planned purchases of laptops (eight percent ) remain unchanged.

Consumer interest in netbooks (14 percent of respondents) is down about 10 percentage points since the June 2009 survey.

Changewave survey - tablet pc and apple ipad

Laptop, Netbook Sales Dip as Tablets Grow

Market researcher Gartner has trimmed its global forecasts for laptop shipments, but still expects a 26 percent increase to 214 million units this year. The firm says the average selling price of portable PCs has fallen six percent to $668 from $710 a year ago.

Netbooks likely have been affected. The Consumer Electronics Association predicts U.S. retail sales of netbooks, which more than doubled last year, will decline 12 percent this year.

Apple's iPad Is Going To Destroy The Netbook Market, Says Goldman Sachs

Whether you believe the tablet PC is a substitute for, or a complement to, a netbook, it does seem clear that a tablet's function is different.

The iPad is focused squarely on information consumption versus information production, analysts at Goldman Sachs note. A device that looks like “just a big screen” suggests what users should do with the device: consume information, with limited ability to manipulate it.

The lack of a physical keyboard suggests that the primary purpose of the device is not for inputting large amounts of information, but instead selecting among options, or performing light editing using a soft keyboard, the analysts suggest.

If that is the case, a key element of the experience will be relatively tight integration with content sources. 

I'm not so sure the netbook is destined by be replaced by tablet devices, though it seems obvious that if the reason lots of people carry netbooks or notebooks is simply to consume information and content, that will be the case.

For users who still have to "work" and create content, a tablet simply isn't going to be a viable choice.

Apple's iPad Is Going To Destroy The Netbook Market, Says Goldman (Sorry, Microsoft):

Space Between Smartphone and Laptop Still in Flux

Suppliers have been trying to figure out the demand for, and requirements of, devices somewhere between high-end phones and lower-end PCs for some time, using the general "mobile internet devices" moniker.

In January 2010 much attention was focused on "smartbooks," positioned somewhere below "netbooks" at the low end of the PC category. Those devices tend to feature keyboards.

Post-iPad, the attention has turned squarely to tablet devices, using touchscreen interfaces only. Still, the ultimate shape of end user demand remains unsettled enough that a variety of form factors, operating systems and processor approaches will continue to be tested.

“This market between the phone and the laptop is an area that is undefined,” says Steve Mollenkopf, a Qualcomm executive vice president who is also president of its chip unit. “You will see a proliferation of different devices.”

Some devices will use smartphone processors or operating systems and move up. Other devices might take PC processors and operating systems and move them down into the tablet space. But application use cases are ultimately likely to matter more.

Touchscreen devices likely will prove to be accepted for some uses, but not for others.  Content consumption might be the key use case for some users, while simple email and web browsing might emerge as the key application for others.

iPad is What You Want, Not What You Need

Though we are far from knowing the ultimate success or impact of the tablet PC movement, there is some evidence that Apple is, in fact, creating yet another new market, rather than simply reshaping or displacing an older market.

Gartner Group analyst Carolina Milanesi says "I am also more convinced that this is a device that you want and not a device that you need." That is an instructive comment, as it suggests users may be finding the iPad less a full substitute for a notebook PC or netbook and more a "different" device that might be used in different ways.

"Between my iPhone and my MacBook Pro I have to consciously decide to use my iPad to do anything but read a book, which is the only thing I cannot do with the Pro and I would rather not do on the iPhone because of the screen."

The use case here is, as Apple hoped, something potentially different from a smartphone or a notebook PC.

iPad goes on sale today across key markets in Europe

Why E-Book Readers are Like Netbooks

In some ways, e-book readers are in a situation similar to netbooks, which is to say, they both are product categories that face substitute products. E-book readers are going to be pressured by tablet PCs and even smartphones, while netbooks are going to be pressured from one side by tablets such as the iPad and notebooks whose better features and prices will continue to make them suitable substitutes for netbooks in perhaps seven out of 10 cases.

According to the latest research from Informa Telecoms & Media e-reader sales are expected to peak at 14 million in 2013, before falling by seven percent in 2014 as the segment faces increased  competition from  a wide range of consumer electronic devices.

Multi-function devices notably mobile phones and tablet-form-factor computing devices are the chief competing types of devices e-book readers will face.

This is likely to lead to a segmentation of the e-reader market into two groups; low-price, low-feature models and higher-price devices with advanced features, Informa predicts.

In order to survive, there are a number of approaches that vendors can take. They can develop low-cost e-readers with minimal features that can be used in conjunction with a PC or USB dongle to access additional content. E-readers like the Kobo ($148), may appeal to the cost-conscious reader, for example, Informa suggests.

Alternatively, high-end e-readers will start to resemble tablet computing devices. These will in effect become more like smartbooks than e-readers. Early steps in this direction include Barnes & Noble's latest software update for the Nook which adds games and a more open web browsing functionality.

Many e-reader companies are already looking to develop an electronic reading platform, initially based on their e-reader devices, but that will extend across e-readers, mobile phones, netbooks, note-books and desktop PCs.

The point is that netbook and e-book product segments likely will change as more tablets and smartphones provide end-user functionality that competes with e-book readers and netbooks.

Netbooks Squeezed Between iPads and Laptops

A new survey by Retrevo suggests netbook sales are getting pressure from iPads and notebooks, and the iPad might have gotten as much as 30 percent of potential netbook sales so far this year.

The Retrevo survey also suggests that consumers who were debating buying either an iPad or a netbook have decisively decided to buy an iPad. According to Retrevo, 78 percent of respondents who indicated they were waiving between an iPad and a netbook ultimately decided to buy an iPad.

Laptops are not as “portable” as netbooks but are getting cheaper. Of those consumers who wrestled with the decision to buy a netbook or laptop, 65 percent chose the laptop and 35 percent chose a netbook over a laptop.

Looking ahead, about 35 percent of consumers who say they are now considering a laptop or netbook purchase over the coming year say they are leaning toward a netbook over a laptop, while 65 percent are leaning toward a laptop over a netbook.

Retrevo therefore predicts netbook sales will get squeezed from two sides and will not be able to maintain past growth rates.

None of this yet settles the question of whether the iPad is "merely" a new form factor for mobile PCs or a new product category.

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What Gets Cannibalized by iPad and Other Tablets?

As you might have expected, though lots of people think the Apple iPad is a gorgeous device, lots of people also think it is a bit pricey.

So far, iPad buyers are heavily skewed to 30-somethings and 40-somethings who presumably are well along in their careers and have both the appetite and the means to splurge on one.


Some technology observers have been predicting the demise of the netbook for some months, and with the launch of the Apple iPad, we get our first chance to see whether cannibalization is happening.

The basic line of thinking is that netbooks get squeezed between more powerful smartphones and tablet devices such as the iPad.

A new study from Morgan Stanley concludes that tablets in general will be a big threat to netbooks, as some have suggested.

Netbook sales growth has been significantly flatter lately. Sales still are increasing, just not at the rate they were before. Last July, growth was at 641 percent. In December, growth was 179 percent, and in January it dropped to 68 percent.

According to Morgan Stanley/Alphawise, the biggest product category likely to be cannibalized by potential iPad customers is netbooks and laptops. About 44 percent of potential iPad customers say they'll get it instead of a notebook or, presumably, netbook.

About 27 percent said they'd buy an iPad over a desktop.

To be sure, netbook sales were slowing before the iPad launch, so the slowing netbook growth rate can't be blamed completely on the iPad.

Still, it seems inevitable that netbooks and other cheap ultraportables will face competition from the iPad.

Product cannibalization potential

Google Optimizes Apps For iPad: Which Raises a Question

Google says it has optimized applications for the iPad to take advantage of its large display. Using Gmail on the iPad, for example, users will see a two-pane display that mimics what they are used to seeing on PCs, notebooks or netbooks.

The YouTube and Google Maps apps are preloaded on iPads.

But those features still raise the as-yet-unanswered question: can the iPad uncover significant demand for a new category of device in between a smartphone and a netbook or notebook? Or is the iPad really going to wind up succeeding or failing as a replacement for the netbook or notebook?

Those are quite different outcomes. For me it comes down to the irreducible number of devices I must carry, both locally and when traveling. Around town, the irreducible and desired number is "one." When traveling, because when push comes to shove I use a laptop for work, the irreducible number is "two." Well, actually three, as I carry two mobiles.

Years ago, the irreducible number when traveling briefly floated up to four, when I added the iPod. That turned out to be one item too many, and I no longer travel with it, except when running.

My point is that consumers weighing use of an  iPad will have to decide what it is, before they buy. And that means an identity "crisis" has to be solved before it becomes a huge mass market success. It seems to me to be a very-good media consumption platform, crudely put, an iPod touch on steroids. That will raise the question of the physical need to add more more portable device to the purse or backpack. For some users, that will be a point of friction.

But some people very quickly are going to try seeing whether, in their circumstances, an iPad can displace an existing netbook or notebook. And that could point the way to the iPad becoming a new form of netbook, rather than creating a new category of devices people generally use.

Apple could win, in either scenario, but wins most if it can create a new product category.

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Netbooks Are Changing Consumer Expectations

A new survey by PriceGrabber.com suggests netbooks have set new expected price points for computer purchases, an outcome many suppliers likely feared would be the case.

The percentage of online consumers who personally own a netbook has increased from 10 percent last year to 15 percent early in 2010. Moreover, 11 percent of consumers plan to purchase a netbook in 2010.

The disparity between the dollar amount consumers are willing to pay for their next device compared to the amount they paid for their last device is evident. About 65 percent of consumers say the maximum amount they plan to spend on their next computing device is $750, even though 52 percent of online consumers spent more than $750 on their last device.

The average price of products in the PriceGrabber.com laptop category dropped to $645 in December 2009, from $808 in December 2008. This suggests a 20 percent decrease in average price.

Netbooks are more of a complement than a replacement for laptops, though. Some 55 percent of consumers do not see a netbook as a feasible replacement for a laptop. Additionally, 63 percent indicate that a netbook is best described as an additional device while on the go, not a substitute for a notebook or desktop PC.

The largest age group of netbook owners has shifted from 35 to 54 years to 45 to 64 years over the past year, the survey suggests.

In January 2009, 53 percent of netbook owners were between the ages of 35 and 54 as compared to only 31 percent one year later. In January 2010, 55 percent of netbook owners fall within 45 to 64 years of age as compared to 43 percent last year.

Of those consumers who indicate personally owning a netbook, 86 percent also own a laptop and 73 percent also own a desktop. More netbook owners indicated also owning laptops and desktops last year.

The survey suggests there is an opportunity for netbooks to cannibalize other products, though. In fact, 72 percent of consumers see a laptop as a feasible replacement for a desktop, 45 percent of consumers see a netbook as a feasible replacement for a laptop, and 27 percent of consumers see a netbook as a feasible replacement for a smartphone.