Netbook market crisis as iPad takes over the world

Apple’s iPad has eaten the lunch of the nascent netbook industry, with major PC manufacturer, Asustek, lowering its netbook shipments targets for 2010’s third quarter in response. Netbook sales are in decline as Apple’s iPad prevails in new markets.

Asustek Computer saw sales of its netbooks in the second quarter fall short of expectations mainly due to competition from Apple’s iPad. Digitimes tells us the company response to this has been to lower Q3 targets — this is highly significant ads Q3 is the traditional biggest-sellling period.

The manufacturer now hopes to sell 1.4 million netbooks, but will offer its own tablet solutions (the Eee Note and Eee Pad) in the fourth quarter.

There’s a lot riding on the fourth quarter, when iPad attempts by multiple manufacturers are expected to hit the market. Meanwhile iPad mind share continues to increase, with Apple seemingly set to boost this a little pre-Xmas with reported launch of a seven-inch model and faster processors in 2011.

Despite its portability, only 15 per cent of UK iPad users regularly take their iPad out with them, according to a survey by Cooper Murphy Web. 38 per cent say the Apple tablet is their preferred device for browsing the internet, while 55 per cent of iPad owners would still rather use a laptop or desktop computer.

The device is attracting enterprise sales for Apple and is rapidly finding favor among hitherto untapped markets, including the elderly.

Atlantic Equities analyst James Cordwell says the iPad’s popularity with the elderly is helping Apple reach beyond its traditional base of younger customers.

“Demographically, the world, especially in developed markets, is getting older, and it’s probably where Apple is least penetrated,” Cordwell told Business Week.