Strong sales of tablet computers, most notably Apple’s iPad, contributed to a 7pc growth in the computer industry, albeit at the expense of notebook and netbook computers.
During the first quarter of this year, tablet shipments reached 6.4m units worldwide. Apple accounted for 74pc of these shipments, while other vendors struggled to bring competitive products to market.
Canalys expects next quarter will see a significant change in the market, with products appearing from Acer, Asus, LG and RIM.
Apple continued with its strategy to dominate the pad market, with the iPad or iPad 2 available in 59 markets by the end of Q1. A combination of strong Q4 sales and the announcement of the iPad 2’s launch across major markets at the end of March contributed to Apple’s iPad shipments being down 31pc sequentially.
The full impact of the iPad 2 launch will not register until subsequent quarters, as Apple gets the product into the hands of consumers. While tablet sales continued to lift Apple’s results, PC vendors with a focus on the consumer netbook and notebook market, such as Acer and Asus, did not fare so well.
Overstocked retail channels and unsteady consumer confidence in major European countries and the United States cast a shadow over the potential for notebook market growth during the remainder of 2011.
Likewise, the tsunami and earthquakes in Japan led to an 8pc slowdown in the local PC market there. The natural disasters also contributed to supply chain disruption and uncertainty – highlighted in many IT vendors’ quarterly financial reports – the consequences of which will continue to be felt in the second half of the year.
The iPad’s ‘halo effect’
“Taking into consideration the iPad’s ‘halo effect’ on the company’s other products, Apple has grown considerably in most markets worldwide,” said Canalys analyst Tim Coulling.
“As the iPad 2 and its competitors continue to roll out, we expect pad sales to propel PC market growth for the rest of the year.”
The findings of a recent consumer survey by Canalys shows that current tablet usage resembles that of a PC, rather than a media player or e-book reader.
After web browsing, both tablet owners and non-owners in Western Europe linked tablet usage to email/messaging and social networking. Among pad owners, all three categories rated much higher than e-book reading and video watching. Non-owners, however, expected email/messaging, e-book reading, and video watching to top pad usage after web browsing.
At least 10pc of Western European tablet owners surveyed by Canalys claimed to use more than 24 application categories, spread across communications, entertainment, leisure/lifestyle and financial/business. Educational apps were the only exception, only used by about 8pc of pad owners.
iPad owners used a significantly wider range of categories than other pad users. The most popular apps among non-iPad owners tended to be relatively functional ones, such as email, social networking, news and banking. While iPad owners also used these apps, they reported a much higher use of general web browsing and video consumption.
Feedback from potential pad owners shows how pad marketing campaigns, some of which refer to the devices as ‘media tablets’, have influenced their perceptions. In reality, pads have a wide range of uses. While browsing, for example, does include finding and consuming content, it also includes many other activities.
“This broad usage pattern reinforces the pad’s role as a general-purpose computing device, and much more than just a consumption device,” said Coulling. “The pad represents a real threat to PC and consumer electronics vendors, as it is capable of replacing devices in a range of other categories.”
Canalys attributes differences between iPad and non-iPad users to screen size, user experience and app inventory.
While the iPad has a 10-inch screen, a large proportion of other pads have 7-inch screens. There is evidence from video service providers, such as MobiTV, that the time consumers spend watching video on different devices is directly proportional to screen size. Non-iPad users’ choice of e-book reading over video watching as the most valuable app by four times as many respondents supports this conclusion.
“Vendors should continue to promote content consumption as an important benefit of pads, especially as ownership spreads to older consumers, while highlighting other uses of the device and preloading advanced browsers and localised messaging and social networking apps,” said Canalys chief analyst Adam Daum.
“Tablet app stores also need to offer a broader inventory of both apps and content designed to take full advantage of a tablet’s size and functionality.’
“Beyond a one-stop sales opportunity, content and apps provide vendors with the chance to drive new revenue streams,” said Daum.
“Apple’s ecosystem suggests that pad owners will generate substantially higher average revenue from app and content sales than smartphone users. Through a combination of appropriate device marketing and app store strategy, device vendors can use apps and content to build customer loyalty,” Daum said.
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