updated 09:45 am EDT, Thu November 4, 2010
Windows exec admits iPad hurting netbook sales
Microsoft's Windows product management GM Gavriella Schuster surprised the industry with remarks that the iPad was taking away netbook sales. When asked about the trend, the division leader said netbooks were "definitely getting cannibalized" by tablets, of which the iPad is nearly the only model. Both netbooks and tablets were "and" devices that were supplements to a main computer, she stressed to Seattle's Post-Intelligencer, but this made netbooks vulnerable.
Schuster quickly qualified the remarks by pointing to Windows adoption case studies that showed the platform as still healthy. Microsoft has sold 240 million Windows 7 licenses in the past year, significantly more than any previous Windows release.
The statements nonetheless directly contradict attempts to reassure investors during Microsoft's fiscal results call, when the company insisted that it wasn't seeing a shift away from netbooks or low-end notebooks towards iPads. Most evidence so far has pointed towards Schuster's interpretation, as NPD researchers saw some buying iPads over netbooks. Best Buy recently acknowledged that netbook sales dropped by half in many of the stores where the iPad was on sale.
Other factors have been attributable to the decline of the netbook, including a lack of meaningful performance upgrades from Intel and a tough economy that has discouraged buying non-essential computing hardware, but Apple's relatively strong iPad sales have suggested at least some buyers have switched form factors. The choice could be a significant concern for Microsoft as it has no direct answer to Apple's design in the short term. Tablets using Windows 7 and Intel's Oak Trail platform aren't due until early 2011, and the more mobile Windows Embedded Compact 7 also won't arrive until the same time.
Current Windows tablets make up less than 2.2 percent of the market and have been so far shunted to the enterprise and other niche industries, including the HP Slate 500. The one-time flagship has been marginalized enough that HP has declined to give any media outlets review units.