Fine young cannibal: Apple's iPad Air competes with laptops for mass market computing

Analysts and pundits ponder the impact of 64-bit tablet on consumer, business laptop industry

Some analysts and pundits have begun calling Apple's iPad Air a PC replacement, raising the stakes in the tablet vs. laptop war.

The iPad Air goes on sale tomorrow, and unlike the four earlier iterations, is powered by a 64-bit processor. And while it retains the original 9.7-in. screen, it's 29% lighter and 20% thinner than its immediate predecessor.

"I'm convinced that the iPad Air is the perfect personal computer for the masses," asserted Ben Bajarin, an analyst at Creative Strategies, in a post to his firm's Techpinions.com website Tuesday. "The iPad has become as versatile as any personal computer on the market."

Others chimed in with similar impressions.

"For anyone who doesn't truly take advantage of the capabilities in Mac OS X (or Windows) that aren't available in iOS, the iPad Air is a superior portable computer to a laptop in nearly every way," wrote John Gruber on his popular Daring Fireball website.

There were caveats, naturally, ranging from lack of a physical keyboard (Gruber) to workplace focus (Bajarin). But the theme was clear: The 64-bit A7 system-on-a-chip (SoC), the longer-than-notebook battery life, the free iWork productivity apps and the much-lighter-than-laptop form factor make the iPad Air a tablet that can compete with a traditional notebook for most people.

It's a bold proposition, one not widely expressed about earlier versions of the iPad, or about few tablets for that matter other than Microsoft's Surface line and the often-radical "hybrid," "convertible" or "2-in-1" designs dreamed up by Microsoft's hardware partners. And it's one not everybody agrees with.

"In every survey we've done, overwhelmingly tablet owners tell us that they didn't buy a tablet as a replacement for their notebook," said Tom Mainelli, an analyst with IDC. "They admit that they use a notebook less, but one-to-one replacement, that really isn't happening."

The numbers support that. While tablets are generally credited -- or blamed -- for the stagnation, then contraction, of traditional PC shipments, sales of the former have not depressed sales of the latter on a 1-for-1 basis. If they had, the PC industry would be struggling to simply survive: According to IDC, tablet shipments in the third quarter equaled 58% of the number of PCs shipped during the same period.

But neither Mainelli's IDC or rival Gartner have been able to quantify the notebook cannibalization rate, or as Mainelli put it, "Come up with a formula that says X minus Y equals Z."

It's not that easy. "To be honest, we've tried to put the numbers together, but it's just more complicated than 'I buy a tablet and it replaces a notebook,'" said Mainelli.

He was dubious that tablets, even the iPad Air, were ready to step into laptops' shoes across the board -- particularly in business, where Microsoft is entrenched in large part because of its Office suite. "PCs in businesses are not going away," Mainelli said.

Echoing Mainelli was Carolina Milanesi of Gartner. "It's not because of the form factor," said Milanesi of tablets and enterprise reluctance to swap them for notebooks. "It's because it's iOS. There's still a lot pulling to Microsoft from an application point of view."

Still, notebook-for-tablet swapping is the future, maintained Mainelli, and even if the iPad Air isn't the tipping point, it has moved the needle. "The 64-bitness of the iPad Air lends itself to this," he said.

True, assuming things work out as many analysts believe. They've viewed the A7 processor, and the underlying promise of more sophisticated apps, as an important duo for development of more powerful and memory-intensive tablet productivity apps.

Meanwhile, although Milanesi has seen enterprises that have handed out tablets in lieu of laptops, they're the exception for now. "We see an acceleration [of tablet adoption] only if the enterprise is making an investment in mobilizing their business," she said. And that means developing line-of-business (LOB) apps for those tablets, not just handing out an iPad or Android tablet to employees and expecting them to do the same work as before.

But Bajarin and Gruber's premise may, in fact, be old news. In some households, the cannibalization of laptops has already happened.

"In 2009, before the iPad, netbooks were ruling the world," said Mainelli of the cheap, small notebooks that captured as much as 20% of shipments soon after their late-2007 debut. "Some were making the argument then that the PC was on the path to a mature market, where everyone in the family was going to have a notebook."

And in some families, that's what occurred, as parents bought inexpensive netbooks for their school-aged children, keeping their higher-powered notebooks for themselves.

"But what tablets did is flip that toward one PC in the household, while everyone else has a tablet and a smartphone, or just a smartphone," Mainelli said.

For those families, tablets have cannibalized laptops, netbooks, specifically. For them, that's made the remaining PC or PCs even more of an investment, argued Milanesi. "Consumers are replacing their lower-end notebooks, which over time means that, as they turn away from notebooks, the notebooks and desktops they do have will be at the very high end."

Others have made that same argument, including Bajarin, and theorized that that single, high-end personal computer means Apple's Macs have the edge, since those machines dominate the premium part of the price spectrum.

The biggest stumbling block to increased cannibalization, at least in business, said Mainelli, is Microsoft's Office, which is not available for the iPad, Air or otherwise. "That's really the last thing that's not on there," Mainelli said.

Microsoft's decision to withhold Office has been interpreted as a defensive move to protect its own Surface tablets, which either come with Office (Surface 2) or can run the suite (Surface Pro 2). But if Bajarin, Gruber and others are correct -- that the iPad Air threatens traditional, Windows-powered notebooks -- Microsoft's move makes even more sense. It could be seen as a broader effort to defend against higher laptop cannibalization rates, which would threaten a major chunk of its Windows licensing franchise.

Even so, times are changing, said Mainelli. "As tablets become more functional, their imitations, whether the lack of Office or others, will A, fall away, and B, people will get comfortable doing more and more with their tablets."

That bodes ill for the PC industry, and for Microsoft -- not immediately, perhaps, but over time. Milanesi sees the timeline stretching out as long as five years.

Gruber, in a follow-up post Wednesday -- it's actually commentary appended to a link to Bajarin's Techpinions piece -- didn't offer a timetable, but said much the same.

"I see the iPad taking over the mass market from laptop PCs ... subtly," Gruber wrote. "I think it's more about people hanging on to old laptops for legacy tasks, spending their money now on new iPads, and then using their old laptops less and less over time. If you're thinking about this trend as switching cold turkey, dropping all Windows/Mac usage in lieu of iOS in one fell swoop, you're thinking about it wrong. It's a subtle weaning."

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

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