A recent note by Needham analyst Charlie Wolf suggests that Apple’s (AAPL) iPad tablet is replacing the sales of traditional PCs to schools and students. Wolf said PC education shipments fell nearly 14% in the second quarter.
Meanwhile, Apple said it sold nearly a million iPads to the K-12 market during the quarter – double its year-ago totals. For Wolf, that’s “definitive evidence” that the iPad has been “cannibalizing” PC sales to schools.
While the iPad is not the world’s only tablet, and competitors like Google (GOOG), Microsoft (MSFT) and Amazon (AMZN) are lining up as competition, Apple’s market share of more than two-thirds of all tablets sold presents a relatively solid stand-in for the market.
For Wolf, this development in the education market is only the beginning. Over time, he believes the iPad will chip away at other, larger markets.
“In our view, the education market is the canary in the coal mine,” Wolf wrote. “The next market is likely to impact is the much larger US home market.”
However, Apple itself may not be immune to some cannibalization. While the iPad set an all-time quarterly record of 17 million devices sold, worldwide Mac sales fell 4.6%. This may be the price of re-defining consumer technology.
The Tablet Takeover motif has risen 2.7% in the past month, compared with 4.2% for the S&P 500.
Performance of motifs are for informational purposes only and are based on performance of a motif for at least the previous month. Performance not based on results you could expect to achieve. See how we calculate returns.