iPad's Popularity Comes at Netbooks' Expense

Nearly one in three buyers who had been considering a netbook did their evaluations and then bought an Apple iPad tablet instead, according to a survey of more than a thousand U.S. consumers by the consumer electronics review site Retrevo.

The firm asked consumers if they held off on buying a netbook after the iPad was announced in January. Only 30 percent said they didn't wait and went ahead and bought a netbook. Another 40 percent decided to go with a notebook instead while the remaining 30 percent chose the Apple(NASDAQ: AAPL) iPad.

The equation gets even more interesting when notebooks are taken out. In that scenario, 76 percent of those surveyed chose the iPad over the netbook. The survey also found people preferred laptops by a two-to-one margin among both those who had already made a purchase and those considering making a purchase in the near future.

Netbooks are still projected to sell well and peak this year but then start to decline. There have already been initial reports that the iPad was eating into netbook sales and is also sending vendors with their own tablet plans back to the drawing board.

The iPad is even on pace to outsell the Macintosh at this point.

When asked why they liked netbooks, 54 percent said portability, by far the top reason. That was followed by price, at 20 percent, battery life at 19 percent, and 7 percent gave some other reason.

Retrevo echoed a common sentiment expressed by research firms such as Gartner and IDC that netbooks will not continue to enjoy their rampant growth.

"Don't expect to see the record growth continue for netbook sales in the U.S. As consumers find the iPad irresistible and inexpensive laptops more practical, we predict netbook sales will get squeezed from two sides and will not be able to maintain past growth rates," Retrevo officials said.

"That said, netbooks should continue to get cheaper and faster and will continue to be an attractive alternative to laptops or other mobile Internet devices," wrote Andrew Eisner, director of community and content, in a blog posting announcing the findings.

None of this surprises Tim Bajarin, president of Creative Strategies. "This is a very good first survey but at 1,000 people, it's a fairly small sample. What's clear about it is most of the contention among us researchers is the iPad and tablets will have an impact on netbooks over the next two years. Our prediction is netbooks will peak this year and start to decline," he told InternetNews.com.

There's two elements squeezing netbooks: thin and light notebooks are getting down to netbook prices but are more capable, and tablets offer an appealing alternative to people who just wish to consume data. Bajarin echoes what Intel CEO Paul Otellini said about netbooks being "consumption devices" at Intel's recent analyst conference.

"If you do just consumption, then a tablet is a better choice. It's easier to use, easier to carry. The only reason to use a netbook would be content creation as well," said Bajarin.

Andy Patrizio is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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