Analyst implies MacBook Air cannibalizing iPad

“Rodman & Renshaw’s Ashok Kumar has issued a note to clients loaded with nuggets that, if true, would spell bad news for tablet computers,” Philip Elmer-DeWitt reports for Fortune.

• Supply chain checks that suggest that Apple’s (AAPL) monthly iPad production rate is unlikely to exceed 2 million per month by year’s end — considerably less than the 3 million/mos. some had predicted. That would put those 6+ million sales estimates for the December quarter at risk.

• Unspecified “anecdotal evidence” that the MacBook Air is cannibalizing the iPad.

Full article here.

John Gruber wrote for Daring Fireball back in September, “Regarding the then-imminent iPad, Kumar told CNet on January 20: ‘Apple will have two different (offerings). Taking a page out of the Google book, one will be subsidized through a (telecommunications) carrier and the other one will be direct through their stores.’

“Wrong. The iPad comes in both 3G/Wi-Fi and Wi-Fi-only flavors, but both are sold directly from Apple, with no carrier subsidies (and no contracts),” Gruber wrote.

Gruber reported, “One day later, just a week before the iPad was unveiled as a GSM device on AT&T in the U.S., Kumar gave the following ‘exclusive’ information to TheStreet.com: ‘The hotly anticipated Apple Tablet — or the Apple Newton II — will feature a wireless chip made by Qualcomm. This discrete little fact would confirm that Apple has chosen Verizon as its telco partner, says Northeast Securities analyst Ashok Kumar.’

Gruber continued, “Right after the iPad went on sale in April, Kumar had this to say about demand in a report by The Financial Times: ‘Apple had told manufacturers it wanted to produce a million iPads per month and ‘that’s clearly in excess of demand,’ said Ashok Kumar, an industry analyst at Rodman & Renshaw. ‘Eventually it will find a niche and a success, but it’s not going to be of the scale and scope of the iPhone.'”

Gruber reported, “In fact, the supply of iPads was unable to meet demand until just a few weeks ago. The iPad is selling faster in its first year than the iPhone did.”

Full article here.

21 Comments

  1. To be fair, I’ve definitely noticed a lot more customers trying to decide between the iPad and the MacBook Air than I did between a MacBook/Pro and iPad before. Then again, Apple even said they were trying to make the MacBook Air more iPad-like, so I’m guessing they knew this might happen and aren’t too concerned.

  2. That Ashok Kumar, a great film star of Bollywood yesteryear apparently, still has more credibility than this Ballmer’s whatever, who feels he is an one man army of sarcasm riot.

    MDN MW: ‘single.’

  3. Look at this way, if you want a 3G iPad with maximum storage so it’s not useless a year from now when you fill it up with your junk and apps, throw in a monitor stand/keyboard it’s about $1000, the price of a dual core MacBook Air with lots more storage, a monitor stand and real keyboard.

    So??? Why buy a limited iPad when you can run Office and whatever you want on a MacBook Air?

    Makes a lot of sense. Right?

  4. This is not a concern at all. In fact, if a consumer doesn’t have a tower or mini tower at home, then the MA can act as their home computer. If anything, they should buy both a MA and an iPad. If they do have a home system and they travel a great deal, the iPad would suffice, as long as they’re primary interests are using and Office Suite, Email and the Internet. If the use of heavy duty programs is required, then the MA should be their road device of choice. Even still, they could still use the iPad as their casual device and home/office. Essentially, Apple made it easy for consumers in these situations to buy both :0 )

  5. I own the last iteration of the 1st gen MBA, and an iPhone 4. The iPad practically overlaps both units extensively, but not completely.

    If iPad hardware and software updates this spring give it a camera or two, facetime, and true video mirroring in keynote, I will have no desire to upgrade the MBA and I’ll go with a less expensive iPad. After all, the MBA isn’t my only Mac and is used for travel, presenting keynotes when out of town and surfing the web in bed at night or in front of the TV at night.

    Kumar’s speculative analysis is opposite of my real-world experience and thoughts.

  6. “Analyst implies iPad acting as ‘launchpad’ for higher margin MacBook Air sales.”

    It’s all in the framing. Pfffft “cannibalize”.

    — Disclaimer: I do not know the actual product margin for either product. Just making a point.

  7. All this bad press was part of the Media/Market/Hedgefund coordination plan to support today’s Bear Attack on Apple’s stock. They ran the stock down over $12.00 a share which knocked out the Stop prices on most regular investors. The Hedgefunds were set to make millions on Options and will cover their short positions. The stock runs back up where they can do it again. The regular investor won’t have the proceeds settled for three days. By then the stock will be much more expensive to buy back. It’s SEC Sponsored highway robbery!.

  8. Just came from my apple store.
    Sure the MBA is nice, and it has it’s followers. But the iPad station still had more people drooling.

    My next MacBook will be an air… But I’m waitingto buy my iPad till next year, facetime is 99% of my reason.

    Cash burning hole in pocket… April get here fast.
    (I know, buy one now and sell it when ipad2 comes out, tempting…)

  9. The MBA is a familiar form factor, so people gel more comfortable buying one. Also, the iPad is still limited in printing and for other work, so a MBA may be someone’s best choice.

    Either way, no one’s buying a Dell over an iPad or MBA. Apple still wins.

  10. I didnt know the mba had 40,000 apps plus 300,000 iphone apps.. to play with, oh and yes ibooks while sitting on a couch is so much more confortable.. And it prints wow hahaha some people are just to stupid to compare them.

  11. It will be interesting to see how much MacBook Air sales have increased since the new generation was released. In fact, I would like to see three trend lines. MacBook Air, iPad, and Air/iPod combined. The third trend line will show evidence of cannibalization if there is any at all.

    Cannibalization of the iPad may not be a good thing for Apple. Apple makes extra revenue from app sales that they do not get from the Air. The Apple App Store needs to have a strong market.

    When Apple opens the App Store up to desktops and laptops, they may not generate as much revenue as they do with the iPad, iPod, and iPhone. This will be another interesting development to watch.

  12. Some people will want a ultra-portable computer with a keyboard and trackpad, and the more traditional Mac OS X user interface. Some people will want a tablet with a multi-touch interface. And some people may even want both.

    Either way, they are buying an Apple computer, so what’s the big deal? The average retail price for an MacBook Air is twice the average retail price for an iPad (and Apple has priced iPad more aggressively to further lower profit per unit), so Apple would be glad to have a MacBook Air sale displace one iPad sale.

    iPad sale = WIN
    MacBook Air sale instead of iPad sale = bigger WIN
    Customer wants both = double WIN
    The competition = LOSE

    Those two Apple computers are used very differently. The MacBook Air is small and light, but it does require a flat working surface (or your lap if you are on a couch). An iPad is used while being held. One uses keyboard/trackpad and the other uses touch. I think most customers will know in advance that they want one or the other; it’s not like they come into an Apple Store and can’t decide which to buy.

    So I don’t actually believe the new MacBook Air is “cannibalizing” iPad sales to any significant extent, any more than the rest of the MacBook line takes away from iPad sales. However, consider the converse. If iPad did not exist yet and Apple released this new MacBook Air, I think Apple would be selling significantly more MacBook Airs right now.

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