Why tablets are killing netbooks

Why tablets are killing netbooks


Whether you’re an iPad sceptic like many geeks or infatuated with it like many consumers we’ve reached a point where the balance of tablets and netbooks is beginning to tip in the favour of the tablets. This is happening both in sales and even hardware performance.

Microsoft’s general manager of investor relations Bill Koefoed drove it home when in the last Microsoft earnings conference he said there was “a 40% decline in netbooks” in the last quarter of 2010 which in turn had made the PC consumer market decline 8%. Other manufacturers have reported stagnation in netbook markets. Chipmaker Intel whose Atom CPUs power most netbooks has confirmed that sequential flat quarters in Atom processors sold to netbook markets was due to cannibalisation from tablets.

Craig Skinner senior consultant at Melbourne-based analyst house Ovum says: “The netbook numbers have certainly been dropping off and the obvious thing that’s been eating that has been the tablet devices. I think that we certainly haven’t seen it finish reducing yet. We’re still at a very early stage of the tablet adoption. We still have quite a long way and a lot of growth there.”

Skinner however believes that netbooks are here to stay as a niche market for those consumers who still want something highly portable but with a keyboard.

Why the tablet popularity?

So why are tablets so popular? Is it because the form factor appeals or are they just an inevitable product of the organic evolution of personal computers?

Mark Pesce a Sydney analyst and future forecaster says: “Nearly all of what we did with huge boxes 15 years ago can now be done on mobiles. Tablets sit comfortably in between the whale and the minnow. They’ll converge on the dimensions (and thickness) of a sheet of paper over time as they grow increasingly pervasive and useful.”

Skinner pointed out that it’s important to look at the way consumers are using the competing technologies when it comes to producing and consuming content.

“When you’re doing a lot of word editing or photo editing drawing or working on a spreadsheet you want to use a notebook or desktop to do that. With netbooks if you want to do a lot of typing your fingers are a bit cramped on the keyboard. But on the other side with the consumption of media and content the netbook isn’t really designed for that either.â€

Essentially that’s where tablets have come into their own. The tablet technology is ideal for a bit of typing social networking and reading. The tablet really focuses on that different specialist role whereas the netbook tries to do a bit of everything and doesn’t do any one thing exceptionally well.

“The intuitive ease of use of the tablet weighs in too†says Skinner. “Netbooks are a watered-down PC platform that still runs standard software which can often frustrate consumers. On the other hand tablets are based on smartphones so they have simpler operating systems and apps are developed specifically for the devices and their multi-touch screens. The end result [is a] tablet is a lot more efficient and takes advantage of the features of the device.â€

Form factor

The single form factor of the tablet (that is no attachments like keyboards or screens) is perfect for many uses such as having the tablet on your lap to watch TV or movies.

Pesce says: “It’s all about interfaces. How often do you need a keyboard? That drives the notebook/PC. For everything else it’s a tablet or a mobile.†Perhaps in one sentence Pesce neatly sums up the devastating power of the tablet: “If a computing task doesn’t need extended use of a keyboard then it’s perfect for a tablet. It means that we probably haven’t even scratched the surface of what could migrate to tablets.”

Skinner says the attraction of not having to open up the lid to use a tablet made it ideal to use on a train plane crowded environment or as a student in a university lecture. “The fact that it’s sort of a single surface that you’re working with is quite an important part of that ease of use” Skinner says. “It doesn’t take up much space on your desk or on your lap. You can sort of hold it up to your face and you don’t have to rest it on something.”

And as for the missing keyboard if more typing is required then a Bluetooth or USB keyboard can be attached – and suddenly you have a hybrid device. You can then tuck the keyboard away to use when it’s needed later.

Complementary devices

Another trend that goes hand in hand with the explosion in tablets is the increased adoption of the cloud by consumers. Cloud clients such as Google’s email service Gmail and DropBox for document and file hosting have helped make tablets much more functional than originally expected.

“You have all the documents you use from different devices and you don’t need to be thinking about it. You’re at home working on the notebook you’re working on the document” Skinner says. “You head off on the train or on a trip or something you just take your tablet with you and you still have all your documents and everything with you.”

Forecasts

Ovum analysts forecast that tablets are here to stay: global shipments of portable devices based on a ‘lite’ OS will hit 150 million per year by 2015 from 2.8 million in 2010. Up to 35% of global shipments in 2015 will be in our backyard in the Asia-Pacific region.

“We believe that Apple constituted 90% of the market in 2010. However by 2015 we expect this market share to drop to 35% and Google’s market share to rise to 36%. Other software platforms such as RIM’s BlackBerry Tablet OS and HP’s webOS will find some success but between them all they will only account for 29% of the market†said Tony Cripps Ovum’s principal analyst.

It remains to be seen if the predictions will meet their forecasts but all indications now are that tablets are likely to take over computing where a keyboard is not essential. And that’s a big slice of what we do.