Thursday, October 14, 2010


It’s not news that the 9.7” Apple iPad changed user behavior and reshaped the mobile PC world by creating a new segment. But this is news: The iPad’s success might also reshape the competitive landscape in the mobile PC world (which includes notebook PCs, mini-notes, the older tablet PCs and the new slate PCs). Traditionally, Apple’s mobile PC products have been adopted by a certain number of Apple fans but they have never helped the company gain significant market share within the segment. According to the Quarterly Notebook PC Shipment and Forecast Report, Apple sold 7.6 million mobile PCs in 2009 and ranked #7 in the world with 4.4% share, behind HP, Acer, Dell, Toshiba, Lenovo and ASUS. Compared to companies such as HP (20% market share), Acer (18%) and Dell (12%), Apple was not a big mobile PC brand in 2009. Toshiba and Lenovo sold more than twice as many notebook PCs as Apple in 2009.

However, the iPad boom might change everything. Apple could not only surpass ASUS, Toshiba and Lenovo by becoming a top 5 mobile PC brand—it could also threaten Dell’s #3 position. It’s very interesting to see how a product like the iPad can reach more than 10 million shipments in its first year and also reshape competitiveness in the PC industry.

Excluding the iPad, Apple plans to ship 9 million mobile PCs in 2010, up 18.4% over 2009. This is a comparatively lower Y/Y growth than other brands. However, Apple seems to have put most of its efforts into iPad development and shipment rather than its other mobile PC series, such as the MacBook. According to the Quarterly Notebook PC Shipment and Forecast Report, there will be more than 13 million 9.7” mobile PCs shipped in 2010. Apple’s target is actually higher than this number, but supply chain constrains have limited availability. In 1H’10, Apple sold approximately 4 million iPads, and in 2H’10, Apple will likely ship 9 million. Including iPad, Apple’s total mobile PC shipment will hit 22 million, up 176% Y/Y, which helps Apple to surpass ASUS, Lenovo and Toshiba. In other words, Apple has been hovering between positions #6 and #8 in mobile PC for many years, but one single product makes it rocket to #4. The company is not only changing the mobile phone world with its iPhone but also changing the PC world with its iPad.

iPad Reawakens Interest in Tablet PCs
The iPad is very similar to the tablet PC, which is not a new product. Years ago, Microsoft developed the Windows Tablet PC edition, aimed at business users, and brands including Dell, Fujitsu, HP, Lenovo, Panasonic and Toshiba introduced tablet PCs targeting the commercial segment. However, these products never took off. As reported in the Quarterly Notebook PC Shipment and Forecast Report, 2009 tablet PC shipments were only 1.5 million units, down from 1.8 million in 2008. Intel then had a new idea called MID (Mobile Internet Device), which targeted consumers. Intel’s original concept was to have a portable device with a low power consumption CPU and a very simple operating system that would be used for personal multi-media, social networking and web surfing. These features are almost the same as the iPad! However, the MID wasn’t clearly defined for end users, and it has never been a successful product.

The iPad has finally popularized the tablet industry. In its first year, the iPad will reach more than 13 million in shipments and it’s expected to hit more than 25 million next year. This success has led many brands to plan their own slate PC products. But everyone is wondering if the iPad’s success will translate to success for slate PCs introduced by other companies?
Many people believe that the iPad is not successful only because of its elegant look and seamless touch screen interface but also because of its applications, content and services, including Apple’s iTunes, Apps Store and iBooks. Therefore, if a new slate PC wants to be successful, it has to strengthen its multi-media functionality, with e-books, mobile TV, music and, probably most important of all, games. Of course, a good operating system will be vital.

In addition to the Apple iOS operating system, which dominates with over 90% market share, there are several new operating systems, such as Google’s Android, Microsoft’s Windowbased, HP’s Web OS, Nokia’s MeeGo and RIM’s QNX. Many slate PCs will be introduced in late 2010 and early 2011, but it will be difficult for any of them to challenge the iPad’s market position in the next few quarters. In the long run, DisplaySearch thinks Android is most likely to compete with Apple iOS.

Furthermore, the iPad will probably make it difficult for the mini-note to survive, as noted in the DisplaySearch press release, “iPad Leads the Tablet PC Charge as Mini-Note Shipments Plummet.” The iPad is already cannibalizing the mini-note market.

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