Best Buy CEO: iPad cannibalizing laptops big time

I’d heard about the iPad cannibalizing sales of netbooks, but drawing users away from full-featured notebooks? That’s another thing entirely. According to Best Buy CEO Brian Dunn (as quoted by the Wall Street Journal), that’s just what’s happening right now. Behold, the sentence that’s making the rounds on gadget blogs today:

Mr. Dunn also said internal estimates showed that the iPad had cannibalized sales from laptop PCs by as much as 50%.

The Journal buried the quote in the middle of its story about consumers being increasingly drawn to shiny new gadgets—and retailers capitalizing on the trend. iSuppli’s Riddhi Patel, also quoted in the piece, sums the situation up pretty well: "It has become largely a replacement market. . . . New features are not driving sales in a significant way. People are saying, ‘I could buy a television or something totally new like an iPad that I don’t already own.’"

Best Buy isn’t crossing its fingers hoping folks will, once again, get excited about glossy palm rests and tacky touchpads. The WSJ says the retailer will start offering iPads in all of its 1,093 locations across the United States on September 26, and the retailer has also shrunk its movie and music selection to make room for additional "digital entertainment" products.

Comments closed
    • thermistor
    • 9 years ago

    #43…as long as there are grammas in the world to extort, they will be there.

      • paulWTAMU
      • 9 years ago

      For some stuff they’re not too bad; I got my appliances there, and thier prices on digital cameras tend to be about on par with Amazon. But for media they’re stupidly expensive. If they tried to cut BR and DVD prices some to at least be close to what Amazon charges (factoring in shipping) they might do a lot better.

    • albundy
    • 9 years ago

    best buy is still around?seriously?

    • JumpingJack
    • 9 years ago

    while it should be expected that tablets in general are going to eat into laptop sales for the consumer laptops, the 50% claim is a bit overboard in my opinon. s

    Someone did a follow-up, it would seem that the BB CEO was making up some gandiose estimate.
    §[<http://www.cnbc.com/id/39237555?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo<]§

    • shank15217
    • 9 years ago

    Just goes to show that people don’t really do much with their computers. The internet is just one social village, people haven’t really changed all that much in the last few thousand years. I guess the genius of Apple is that figured that out, lock stock and barrel.

    Apple’s design mantra….

    1. Make it look nice so you can show it off.
    2. Make it expensive so you can show it off.
    3. Make it sort of useful for keeping people entertained.
    4. Make it easy for people to use.

      • Voldenuit
      • 9 years ago

      Well, to a degree, technical improvements can only take you so far, especially on a mobile platform.

      My guess is that UI improvements will be the distinguishing feature from here on out, and here Apple has a distinct advantage. I’m no big fan of the iPad, but things like the Newton emulator (complete with handwriting recognition!) show that developers can take it beyond Apple’s original intentions.

      • blastdoor
      • 9 years ago

      “Just goes to show that people don’t really do much with their computers.”

      I think this is most of the explanation. Most computer companies don’t seem to understand their customers, particularly when their customers are consumers. The non-apple companies do better whe it comes to enterprise customers, because they do understand the needs of IT groups (they don’t understand the needs of end users in businesses, but that’s ok because IT makes the purchasing decisions and they don’t understand the needs of end users either).

        • TREE
        • 9 years ago

        q[< Just goes to show that people don't really do much with their computers. <]q I have to agree with this statement as well. It used to be viewed that "gadgets" like the iPad would have no real market place, between the desktop and laptop. But the reality is its the laptop that does not really have a market place. Every laptop I've owned has never been a desktop replacement nor a suitable portable device for entertainment or work (lecture note taking). laptops always have a massive compromise here or there making them almost useless in a number of scenarios, depending on the type of laptop i.e CULV.

          • trackerben
          • 9 years ago

          Perhaps because windows PCs, even laptops are themselves a bit of work. To use one correctly is to administer one. iPad is the first general-purpose mobile screen which succeeds as an interactive consumption appliance. Whenever I look at mine I have the mostly joy-joy feelings that come with having easy and instant media at a touch. PC UIs are heavy on pushy and grippy manipulation – after boot-up. They bring to mind maintenance and antimalware, study and work documents, industrial applications, even the games can be hardcore stressful. IPad is on the light or fun side, which dovetails partly with point shank made.

          • swaaye
          • 9 years ago

          Actually I think that the desktop is being slowly supplanted by notebooks out there in consumer land. The low price attached to modern notebooks is undoubtedly at work here, and people like the space savings and loss of some wires.

            • blastdoor
            • 9 years ago

            That was happening prior to the iPad. But I could imagine that the iPad (and eventually similar devices) might cause that trend to reverse. The notebook is a poor replacement for a desktop — small screen, awkward keyboard, limited storage. When it comes to storage of digital libraries (photos, music, videos) or doing “real work” (basically working for an extended period of time on something that requires you to interact with the computer a lot through keyboard/mouse), the laptop is a poor proxy for a desktop with its big screen, nice keyboard, and potential for massive storage. People were willing to make that tradeoff because of the portability of the laptop. But I’ll wager they were using the portability to allow them to do the kinds of things that they can now do with an iPad, not to do the kinds of things that they can do with a desktop.

            So I’m wondering if many people end up ditching laptops and replacing them with a combination of a desktop and a tablet.

      • MadManOriginal
      • 9 years ago

      You forgot:

      5. Leave off at least a few obvious features so there can be an overly celebrated ‘update’ the next year.

        • TREE
        • 9 years ago

        Ha, marketing 101 of course!

    • Voldenuit
    • 9 years ago

    I’d also venture that lacklustre improvements to laptops in the past few months have made the desire to upgrade less prevalent. For most consumers, their old C2D laptop is “good enough”, and a Corei3 doesn’t improve their computing experience in any meaningful way. Not to mention that, as Geoff pointed out, the build and quality of mainstream laptops are actually getting worse these days. Combined with a softer than expected economic recovery (yay, the rich are rich again, but most everyone else is still screwed), it’s no surprise that laptop sales are down, even before factoring in the iPad.

    • blitzy
    • 9 years ago

    everyone i have talked to that wants an ipad havent even thought things through, when you ask them what they think about having to hold onto it to use it without being able to rest it like a laptop…. they go durrrrrrrrr oh yeah

    and to further the irony, companies sell keyboard stand addons that turn it into a laptop… lawl just buy a macbook already.

      • Corrado
      • 9 years ago

      I can get a $500 macbook that weighs 1lb with an IPS display? Where?

    • lilbuddhaman
    • 9 years ago

    Hey, at least they stopped blaming pirates for a while.

      • derFunkenstein
      • 9 years ago

      Yes because we all know you can download iPads. Dumbest non-sequitur ever.

    • WaltC
    • 9 years ago

    *snip* from a post on this topic I made in another forum:

    Assuming we simply took away 50% of all Windows PC sales, Windows PC sales volumes would still exceed OS X PC (called “Macs”) sales volumes by better than 10x. And of course the notion that the iPad would cannibalize Windows PC laptop sales, but that OS X PC laptop sales (called “Macbooks”) would remain completely non-cannibalized by iPad sales, simply proves that *[< iPad sales do not cannibalize laptop sales at all<]*--in the slightest...;) And last but surely not least, it should never be forgotten that /[

      • Skrying
      • 9 years ago

      This is hilarious.

        • jdaven
        • 9 years ago

        What is hilarious is that both you and WaltC can come up with some logic to disprove the CEO of Best Buy who has direct access to sales numbers from his company and neither one of you has any access at all. Hilarious!

        Of course, I can use logic too. Based on past behavior, either this post will generate another boring long winded post from WaltC or he will not post a long comment because I’m pointing out that he will.

        Let’s watch and see!

          • 5150
          • 9 years ago

          -[

          • cycomiko
          • 9 years ago

          If best buys is not selling iPads until 26th September, these are not internal figures, but pulling figures out of a body part, aka estimating.

            • Decelerate
            • 9 years ago

            I think you missed the “*[

            • Corrado
            • 9 years ago

            Yeah, there are best buys that have had the iPad since launch. Just not ALL of them.

          • thecoldanddarkone
          • 9 years ago

          Well the article was corrected it now specifies netbooks. (that’s if it was changed, if not then people need to learn how to read).

          “The paraphrase that was used in the WSJ wasn’t really an accurate reflection of what Brian said to the reporter.

          What Best Buy CEO Brian Dunn said was that we had no firm numbers, but that we speculated there was some replacement of netbooks by iPads going on. We did not provide specifics because we do not presently have the hard numbers on which to base those specifics.”

          engadget.com

          • Skrying
          • 9 years ago

          What are you talking about? I believe the CEO of Best Buy and I don’t see a reason for him to lie on this matter. Where did I even attempt at trying to discredit the Best Buy CEO? In your earlier comment where YOU were the one to make a conclusion and not the CEO? I’m simply stating an alternative reason for why they’re stocking less physical media.

          I’m really confused over what you thought you read.

          • sweatshopking
          • 9 years ago

          dude… I expect more kindness and respect out of you. That’s hardly the behavior I would expect to see from you. Disagreeing is one thing, but lets foster a community of mutual respect and understanding. I personally enjoy walt’s long posts. I spend MOST of my working day on this site (as many of you know) and I am always looking for something to read. Please walt, continue to post. I honestly appreciate a diversity of opinion. Thanks.

          • ludi
          • 9 years ago

          Call off yer dog.

          • jackbomb
          • 9 years ago

          Those “boring long winded” posts from WaltC are always better than yours. :/

            • paulWTAMU
            • 9 years ago

            Except when he entirely misses the point.
            In this case, the iPad fulfills many of the same functions that people use a laptop for. Regardless of if it’s actually technically a laptop, it fills some of the same role and thus may cannibalize some sales of laptops. Technical definitions matter a lot less to vox pop than what they use something for.

            Again, I doubt the iPad’s snatching up 1/2 the sales that would go to laptops (what are the sales figures for it again?) but it isn’t beyond conception that some people are opting to buy it versus a more traditional laptop or nettop.

            • Voldenuit
            • 9 years ago

            It’s also just as likely that Best Buy is losing sales for reasons other than the iPad alone. More aggressive competition, better online deals, poor stocking policy and from at least several gerbils’ accounts, uncooperative and uncommunicative sales staff don’t help matters.

            Course, it’s always easier to blame someone else than to admit that you suck.

            Not saying the iPad isn’t (or won’t be) eating into laptop market share, but I think Best Buy in particular has multifactorial causes for its poor performance.

            EDIT: Considering the newspost just a couple days ago that CPU shipments are up, it’s pretty obvious that if BB is losing 50% of its sales, something is going wrong internally, and they need to fix it instead of blaming the iPad.

            • paulWTAMU
            • 9 years ago

            The increase in CPU shipments may not be tied to increase sales of laptops. Like I said, we’d need more info to be sure one way or the other…and I’d bet $$ that however much it has depressed the sale of laptops is nowhere near 50% just given it’s sales figures versus laptop sales figures. But the assertion that the iPad can’t measurably impact or cannibalize laptop sales simply because it’s a different type of product is silly.

            • dashbarron
            • 9 years ago

            I like how jdaven predicts that WaltC will do one of two things (post or not post), as those are the only options he has to do…except the reasoning behind WaltC’s decision makes jdaven seem like an intelligent, yet sneering soothsayer in the process. Well played jdaven!

            I also like your long posts WaltC.

            • Voldenuit
            • 9 years ago

            /[<"For it is said, go not to the Elves for counsel, for they shall say both no and yes"<]/ - Tolkien. 😛

            • WaltC
            • 9 years ago

            /[

          • designerfx
          • 9 years ago

          see, what best buy sees is: laptop sales are down

          what they have no data on is: their ipad sales.

          So they think ipad sales == laptop sales.

          This is wrong, as pointed out, ipads and laptops are different devices for different categories.

    • paulWTAMU
    • 9 years ago

    I doubt that’s the reason for that sharp a decline–it probably did play a role, but I’d want a lot more research before I accept it as the sole or even main cause of decline.

    • potatochobit
    • 9 years ago

    bestbuy prices on media are not exactly blockbusters

    also, as more and more people get USB plugs in their cars, the demand for CDs is going to become almost nonexistant

    this has nothing to do with ipad though
    do people watch movies on their ipad? most of the videos I watch require flash or a tv tuner

    • roont
    • 9 years ago

    “consumers being increasingly drawn to shiny new gadgets—and retailers capitalizing on the trend”

    that summed it up for me

      • moritzgedig
      • 9 years ago

      I find it interesting that there are still enough people with too much money to buy all this needless stuff.

        • OneArmedScissor
        • 9 years ago

        People with too much money? You’d be surprised. Lots of kids coming out of high school and going into college buy whichever laptop “looks” the best and readily admit it.

    • jdaven
    • 9 years ago

    “…the retailer has also shrunk its movie and music selection to make room for additional “digital entertainment” products.”

    Another sign of the death of physical media? – clearing space for more gadgets.

      • Skrying
      • 9 years ago

      That could be the case or just a signal that buyers are becoming more intelligent about where they purchase physical media from. It’s dangerous to read much into that statement.

        • paulWTAMU
        • 9 years ago

        Yeah. I don’t buy music physically anymore, but I do buy movies–particularly blu-ray ones…but I sure don’t usually buy them in retail stores cause they’re too pricey.

      • burntham77
      • 9 years ago

      That or its cheaper to buy CDs and movies online?

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