The tablet sales phenomenon

In the 3rd Quarter of 2010 March 27 to June 26, 2010, Apple sold nearly 3.5 million Mac personal computers, 2.5 million of them being Macbook's with the remainder being desktops, almost doubling their sales from four years ago (Source: Gigacom). The cheapest Mac, the Mac Mini costs Php38,990 (US$699) and that is without a monitor, keyboard and mouse. The cheapest Macbook is priced at Php51,990 (US$999) and the cheapest iMac is priced at Php64,990 (US$1,199).

Prior to the release of the iPad in April 2010, Apple's most portable personal computer was the 13.3-inch Macbook Air with a price starting at Php91,990 (US$1,799). The 3-pound Macbook Air was the only Macbook which weighed in under 4.4 pounds. For a company who sells two and a half notebooks for every desktop, Apple really did not provide a lot of options when it came to ultraportable devices.

During this phenomenal growth period in Apple's personal computer sales from 2006-2010, netbooks appeared. In 2008, 16.3 million netbooks were sold. In 2009, 33.3 million netbooks were sold (Source: internetnews.com). For 2010, around 30 million netbooks were sold (Source: Sense.com). 

Netbooks were simply cheap low performance ultraportable laptops for emerging markets where laptop sales were marginal because cost considerations. But their phenomenal growth in 2009 proved that the demand for US$300-US$500 ultraportable devices exceeded expections. Some even expected netbook sale to hit 50 million units by 2010. At the time, this was the only affordable device which bridge the gap between a smartphone and a desktop or laptop.

Apple, while providing lower cost laptops, prior to 2010 did not have any entry into this growing market. It could have offered a netbook itself, but instead came up with something else: the tablet. The tablet, looses the functionality of the keyboard and actually provides less power than a netbook, being for the most past unable to run desktop software.

In exchange Apple's iPad offered an even more portable device, which at 1.5-1.6 pounds is roughly 60% of the weight of your typical netbook. It offered the ability to play 720p HD content, and more surprisingly a very competent 3D gaming platform. Something most netbooks could not do. Instead of the cramped touch pad for navigating the web, it offered a touchscreen. It provided a netbook alternative for those who primary consideration was a ultraportable device for web browsing,  playing multimedia content and gaming.

It almost like the people at Apple, played with a netbook, figured out everything that it was not good at, and built something which did focused on what the netbook did not do well.

In a way, the near stagnant development in the netbook platform in terms of graphics performance 2009 and 2010, in a world where HD has become a standard left the door open for another device. In 2011, even as netbooks will now be able to play HD content and do a fair amount of 3D gaming, tablet fever is here. It's cool to have one, that, plus the fact that they have very good merits in terms of portable computing platforms pretty much guarantees their success.

In one sense, with less storage and the inability to run desktop software it provides less utility than the netbook. On the other hand, the ability display multimedia content is something that few netbooks can do competently.   

While to some extent, netbooks may be used by a segment for the market as their primary personal computer, for the most part, netbooks are devices purchased in addition to a desktop or larger laptop. Apples' iPads are designed as additional devices to be used in conjuction with a desktop or laptop. This is due to their small internal storage (16-64GB), and no way to connect them to additional storage except through a desktop or laptop.

Estimated tablet sales in 2010 is between 11-12 million, estimates for tablet sales worldwide in 2011 are between 38 million to 55 million units (Source: Sense.com and Gartner). This is just a fraction of the number of laptops and desktops expected to be sold in 2011.

Looking at the projected sales figures, it almost looks like the tablet is expect to take over from the netbook. Only time will tell whether or not the tablet sales will meet this expectation. I think, tablets will sell well, not only because they provide a new alternative to the netbook. The tablet will not be only considered by netbook buyers, but also by those who never considered buying a netbook. With their ability to play HD multimedia content and 3D games, a lot of prospective buyer who would never consider buying a netbook because of its lack of power as a multimedia and gaming platform, may look favorably at the tablet.