How the iPad Mini Could Impact Future PC Sales

[dc]N[/dc]ow that the iPad Mini has been out for a while and many of us at Creative Strategies have been testing them, it is becoming clear to us that this 7.9” form factor or most 7” inch models will literally become the most important tablet for consumers in the future. There are a lot of reasons for this, but the main one is that it is light, thin, and in the iPad’s case, delivers a best in breed tablet experience. Also, these smaller tablets will always be cheaper than larger tablets because the BOM cost for a smaller version will always be less than the bigger models.

But as I have personally used the iPad mini for some time now, I have begun to see my usage patterns with tablets change significantly. Before the iPad Mini, the tablet I used the most was the original iPad. Although I also used my Kindle Fire HD often for reading and media consumption, the iPad was my real go-to device. And it became even more important to me once I added the Logitech Ultrathin keyboard to it since it now was used for content consumption as well as productivity.

However, there is an 80/20 rule with tablets that is becoming an important metric when it comes to tablets and PCs. It turns out most consumers can do about 80% of the most common tasks they do with a PC on a tablet, and any other key tasks, such as media management, large spreadsheets, music server, etc are designated to the laptop. But once I started using the iPad Mini, I found that it now became my go-to-device because of its lightweight, small size and literal duplication of everything I have on the iPad as well as the full iPad experience.

But there is an interesting twist to this. When my only tablet was my iPad, I defaulted to my laptop for heavy lifting tasks. But once I started using the iPad Mini, I found myself-defaulting to the 9.7” iPad with its keyboard as my main productivity device and found that in this case, a 90/10 rule kicked in. That means that I spent 90% of my time on these tablet solutions and only about 10% on my laptop.

Now I realize that this may not be a broad trend, but we are hearing the same type of storys in our consumer interviews. Although fresh and not fully completed research, many people who have an iPad Mini and are sharing similar stories. Almost all that we talked to told us that the role of the laptop has diminished for them significantly since they got the iPad, and were now using the iPad Mini more frequently than their larger iPads.

When I asked them if they were interested in buying a Windows 8 PC, their comments were pretty consistent. They said that if the PC were only used 10-20% of the time, they would most likely just extend the life of their PCs or laptops instead of buying new ones. And if they did buy a new PC or laptop, it would be the cheapest they could find, as they could no longer justify a more expensive and powerful version if it mostly sat at home and used for such a short time for more data or media intensive apps.

I suspect that this scenario with consumers may play out a lot more in the future, and at the very least, their tablet does handle the majority of their daily digital needs. The PC as we know it today will continue to lose its primary role in the home given its lack of use more often than not.

Even yesterday on a call with analysts Nvidia CEO Jen-Hsun Huang made a key point. He said:

consumers realize “a great tablet is better than a cheap PC.”

If this trend does play itself out as I have suggested, the impact on the traditional PC market could be dramatic within two-three years. As consumers buy lower cost and small tablets that will only get better in performance, screen clarity, and apps, it supersedes their PC use and demand for PCs and laptop will decrease significantly.

As my colleague Steve Wildstrom stated on Wed, PCs will not go away, but will soon play a different role for consumers than they have in the past. But if tablets increase their role as the dominant device for consumers to access the majority of their digital needs, than the impact on PC demand has to be impacted down the road. In fact, some key industry insiders call this the PC Cliff, suggesting that we could see a time in the not-so-distant future where demand for PCs fall by a steep amount, giving way to tablets that will take over their role as the major growth segment and primary of the PC industry.

Interestingly, there could be a silver lining for traditional PC vendors if they innovate quickly. In my comments above, I mentioned that the iPad Mini has now become my go-to tablet while the original iPad with the Logitech keyboard is now my cross over device handling consumption and productivity. And my use of my laptop has declined as a result of this. But for me, the iPad with a keyboard has become kind of a laptop replacement. It is touch based, lighter than any laptop I could ever own, and has an average 10-hour battery life and runs most of the apps I need, as well as giving me a very rich Web browsing experience.

But my iPad with keyboard is really what we call in the industry a hybrid, which has a touch based tablet tied to a detachable keyboard. Microsoft’s Surface falls into this category as does HP’s Envy X2 that they call a convertible. The nomenclature for this seems to be ever changing but we define a convertible as a tablet/keyboard combo that does not detach and a hybrid, a tablet with a detachable keyboard.

The interest in the hybrids as we define it is extremely high, although the demand for Windows RT based hybrids like the Surface is somewhat muted since it does not have backward compatibility with existing Windows apps. Instead, the hybrids we are seeing great interest in, both with consumers and business users, are Windows 8 devices that use an x86 chip and has full backwards compatibility with existing Windows software like HP’s Envy 2 Convertible. But if the scenario I suggest plays out, it will be these hybrids that drive “laptop” sales in the future, while demand for more traditional laptops will wane considerably.

I believe that the iPad mini and smaller tablets will be even more disruptive to the traditional PC market than the iPad has been to date. We can envision a time soon where a user has a 7” tablet mostly for content consumption, email and Web browsing, and a hybrid to pick up any productivity slack they may have. The bottom line is, the more consumers use tablets of either size, the more they realize that the laptop or PC in the home is overkill, and decide to either just keep the one they have longer or buy the cheapest PC they can for any extra computing needs they may have that a tablet cannot do.

I fear that a PC cliff is not far off and we are urging all PC vendors to seriously consider the ramifications of what these smaller tablets will mean to their future PC and laptop demand.

Published by

Tim Bajarin

Tim Bajarin is the President of Creative Strategies, Inc. He is recognized as one of the leading industry consultants, analysts and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has served as a consultant to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba and numerous others.

44 thoughts on “How the iPad Mini Could Impact Future PC Sales”

  1. This is one fine article, filled with nuggets of gold. Some key excerpts and some thoughts:

    “it is becoming clear to us that this 7.9” form factor or most 7” inch models will literally become the most important tablet for consumers in the future.”

    “It turns out most consumers can do about 80% of the most common tasks they do with a PC on a tablet, and any other key tasks, such as media management, large spreadsheets, music server, etc are designated to the laptop.”

    “When I asked them if they were interested in buying a Windows 8 PC, their comments were pretty consistent. They said that if the PC were only used 10-20% of the time, they would most likely just extend the life of their PCs or laptops instead of buying new ones. And if they did buy a new PC or laptop, it would be the cheapest they could find, as they could no longer justify a more expensive and powerful version if it mostly sat at home and used for such a short time for more data or media intensive apps.”

    “CEO Jen-Hsun Huang made a key point. He said: “consumers realize ‘a great tablet is better than a cheap PC.'”

    “…if tablets increase their role as the dominant device for consumers to access the majority of their digital needs, than the impact on PC demand has to be impacted down the road. In fact, some key industry insiders call this the PC Cliff, suggesting that we could see a time in the not-so-distant future where demand for PCs fall by a steep amount…”

    We’re headed for a “tipping point” and we’re headed there much faster than people realize. Without a doubt, we’ve reached peak desktop and peak notebook too. What people don’t realize is, as the author says, that desktop and notebook computers are not only declining but that decline is about to become precipitous – a virtual “cliff” as he puts it.

    And what happens then? Everything is turned on its head. We’ve spent the past 15 years worrying about Windows and Office compatibility. But when the tablet suddenly becomes the majority and the PC suddenly becomes the minority, everything is flipped. No one will worry about making their phones and tablets compatible with their PCs. It will be the other way around.

    A brave new world, indeed.

  2. Computers for the rest of us. About time. Apple finally wrestled computing away from the high priests of IT, first with the iPhone. Then the iPad. Now the Mini.

  3. Evolution is the key it seems. Some eyes need the retina display and when the mini gets that, all that follows may just be tinkering with the specs.

    The iPad original should not be counted out. I suspect there will be less need for the large bezel and maybe with a slight decrease in size the 9.7 iPad may evolve to be the pad with a keyboard, either attachable or built in. Personally, I could see advantages to both though it may be possible that both a detachable keyboard and the iPad have battery power that services the OS with the keyboard battery assisting in keeping the iPad charged longer. Then the detached lighter iPad might challenge the mini’s advantage in weight.

    1. This is exactly the solution that I found works in my home. We have a Mac mini connected to our wireless router and a 32 inch HDTV for a monitor. This provides the solution for the heavy lifting we need in addition to providing a rich consumption experience while our iPhones and iPads provide our mobile solutions. The only thing we have yet to add is the AppleTV.

  4. Wasn’t it always a race to get to beat the 1 pound limit in weight? Amazon won that race. That Jeff Bezos is a smart guy. Now we will see if it’s what you carry over the finish line and not just getting there. Plastic or metal? Camera or not? Apps or no?

    1. “Wasn’t it always a race to get to beat the 1 pound limit in weight? Amazon won that race.” – stefn

      Your stated goal of a 1 pound tablet seems both arbitrary and superficial. The goal is to make a good computer lighter, not to make a computer lighter at any cost.

      1. Consider what breaking the 1lb limit means in terms of smaller, thinner, and lighter. And the big factor I read in reviews are directly related to weight: “easy to hold in one hand,” “easy to read in bed,” “easy to hold for a long time,” and of course “light as a feather.” It’s all about the weight. Or the lack of it. And weight with fitness: Can it do the job it’s declares it can do at that weight? Apple, for instance, says the Mini is an iPad. I’m sure Bezos would not make that claim for the Fire … when he tried it was laughed off the front page of Amazon.

        1. “Wasn’t it always a race to get to beat the 1 pound limit in weight?”
          It’s a straw man argument. Let me call on Betteridge’s Law to aid you. No. The race was to deliver a tablet that worked, easily and completely.

          Amazon hacked together something for last Christmas that was not very good and didn’t sell as well as they liked to imply. I had one, I took it back when it wiped my content for the 8 or 9th time in a month.

          “I own a couple iPads: Weight matters.”

          Oh that’s OK then, it obviously justifies your argument. This is a bit of a boring meme when someone wants to slag off anything Apple does.

          To reduce your argument down to the absurdity that it is. If what you were saying were true then Amazon and Google would publish sales figures. But they don’t. Asus provided enough information for people to calculate the sales of the Nexus 7 to be around the 3 million mark. Since June. Apple cleared that number in 3 days with the release of the two new iPads.

          1. I can’t figure out your comments. If I say I own iPads, it simply says I’m not completely blowing smoke. Which maybe you are. If you think I’m slagging off Apple … you didn’t read what I wrote. Which means your comments are knuckle brained. Get it together before you write.

          2. His comment blew yours to pieces per se.

            Hurray so Amazon won the weight contest but what did it achieve – certainly not more sales. before you start blow smoke that when Apple announced the iPad mini the whatever sold 3 times more – hopefully they can publish some figures to make your argument more credible otherwise it is just hot air.

            Pound for pound your hot air is certainly heavier.

          3. O good. Another lamebrain. I have forgotten more Apple products I have owned that you will ever own. Can’t you read? Is that I said Jeff Bezos is smart? It’s self evident. I thought all the numbskulls in the world bought Android devices. Obviously not. Apple has its own blockheaded, dipsticked, chowder brained cretin cult. I give up.

  5. This is exactly why Microsoft is still trying to push a full blown desktop version of Windows into the tablet space again. They know the writing is on the wall and if they don’t do something, Windows will get pushed into the background.

    It’s a desperation move not unlike re-releasing XP several years ago for netbooks to keep Linux on the side lines.

  6. I predict that when the retina display iPad Mini with the A6 hit the market next fall, the slope will be even steeper. The only gripe I’ve seen from dozens of reviewers is that if ONLY the Mini had the retina, it would be absolutely perfect.

    I see a perfect storm brewing; with slew of retina-enhanced apps that are popping up everywhere, when that iPad hits the street, the competition is going to be caught totally flat-footed.

    Right now, there is only one retina-type tablet display under Android -and absolutely NO 3rd party hi-res apps to run on it. Only scaled smartphone apps -which look like crap on it.

    1. “The only gripe I’ve seen from dozens of reviewers is that if ONLY the Mini had the retina, it would be absolutely perfect.”

      Agreed. The only other gripe is price which is facile at best. What the critics are ignoring is that Apple has already stated that the iPad Mini is selling below their customary margins and that the Nexus and Kindle Fire ARE BEING GIVEN AWAY AT COST.

      If Google and Amazon want to subsidize the tablet use of others, that’s their business. Apple wants to make money. And despite all of the current negativity, there’s every reason to believe they are going to make a boat load of money this quarter.

      1. No way can Apple put retina in mini next year because
        the tech required will first go to ipad 5 to thin it out
        only then will Apple be able get it to mini.

        A6 is not good enough for Retina that is why it is in
        iphone 5. until DRAM speed is either double or its
        bandwidth is increased to 128 bit like done for A6X.
        Plus Apple will most likely use Rogue next year so
        mini will always have hand me down tech.

      2. Why should critics care about the profit margin of Apple?

        Critics are looking at the iPad Mini, Nexus and Kindle Fire from the perspective of the consumer. In my experience few consumers care much about increasing profit margins for the company that makes the product. They actually should care that the company makes some profit at least, but ‘should’ is not the same as reality.

        1. “Why should critics care about the profit margin of Apple?” – W. van Dam

          The critics are asking Apple to sell their product at a loss or at low margins. This is as unreasonable as asking a company to provide technology that doesn’t yet exist or that is cost prohibitive.

          If a critic doesn’t take reality into consideration, then he isn’t a critic, he’s just a crank.

          1. You’re missing the point.

            Does the fact that Apple is trying to make a direct profit and Google and Amazon are not have a significant effect on how customers perceive the value for money of the iPad Mini, Nexus and Kindle?

      3. Apple has turned themselves into a license to print money! Somewhere in heaven Steve Jobs is grinning.

        Good thing Apple didn’t follow Michael Dell’s suggestion to shut down the company and give the money back to the stockholders…

  7. Tried for quite a long time replacing my Mac with my iPad. I’ve come to the conclusion that tablets are for casual use where Macs and PCs are for work. I’ve found that you can do just about anything on your iPad that you can do on your PC, but doing it on a PC is easier and quicker. Anyone who works spreadsheets, relies on keyboard shortcuts, and/or uses macros understands this. When in work mode, speed and efficiency are key.

    That said, the Ultrabook Convertible or whatever it’s ultimately going to be called, could change all that. If Apple were to, for instance, use their ability to make extremely thin/light laptops along with their ability to make extremely thin/light tablets, and then merged the two together say, using a 13″ retina display, and then perfected a convertible mechanism along the lines of that seen in the Ultrabook Convertible train station ad, that device, I think, could lead us to to the PC obsolescence being discussed here.

    1. “I’ve come to the conclusion that tablets are for casual use where Macs and PCs are for work.”

      Work is defined by the user’s standards, not by your standards. If your work doesn’t call for you to manipulate a mouse, use a larger processor, employ a larger screen or the use of a keyboard, then the tablet is almost always the better solution. And, perhaps surprisingly, most computing tasks – both work and play – do not require those four things.

      1. “And, perhaps surprisingly, most computing tasks – both work and play – do not require those four things.”
        Isn’t this a bit hypocritical?

        At least KenJr writes in a manner that you could read his comment as personal preference.

        1. Hypocritical? I’m just observing what’s happening in the real world. More and more people are finding that they can get “real” work done with only a tablet. It’s a personal preference and people are voting for tablets with their dollars.

          1. Yes, hypocritical. You start your comment by criticizing KenJr for assuming his personal observations can be generalized and then you end your comment by making a generalized statement based on nothing but personal observations.

            You could well be right, and I’d like to think you are, but that does not change the comment is hypocritical.

            Also, I’d first like to see some solid figures before I make up my mind. I think that using the forecasts of dollars spend on tablets versus desktop / laptop computers is rather weak for saying people are finding that they can get “real” work done with only a tablet.

            For years there has been a growing realisation that frequently upgrading a PC has become unnecessary in many situations. Also, PCs and laptops have steadily dropped in price. On the other hand, tablets are a new product category, one that does still improve in a meaningful manner with every new generation. Also, while pretty much everyone already has at least one PC or laptop that performs sufficiently for what they need to do, many still need to get their first tablet.

            In short, I think these are variables that play a much bigger role in the trend towards spending dollars on tablets versus pc/laptops.

  8. Nothing can replace a large screen desktop for getting work done, especially when your eyes aren’t what they used to be. I happily use my 8 core Mac Pro with Apple 30 inch display for both work and play. I have a 17 inch Macbook Pro for traveling, and I always feel confined by the form factor. Can’t wait to get back to the big screen. If I buy an iPad, it might be to keep in my car. Otherwise, iPhone is fine for general mobility.

    1. “Nothing can replace a large screen desktop for getting work done…”

      I beg to differ. Can your large screen desktop be used by doctors as they tour the hospital, by guides, by students?

      Don’t make the mistake of assuming that what you define as “work” is the work that all people do. Work is in the mind of the beholder, and more and more workers are beholden to the tablet to get their work done.

      1. I am only talking about myself and my own work, which is specifically image editing in Photoshop, combined with web design with multiple app windows open. Attempting this on an iPad would be silly, especially since I am in my 60s and my eyes don’t work as well as they used to. Large screen desktops will continue to be used for certain kinds of work.

        1. I hope I didn’t insult you, Polimon. I have no doubt that a large screen desktop is essential for your work and the work of many, many others. I was just using your comment as a platform to make a broader point about how the preferences of others is often different from our own.

    2. Think you missed the fact that iPad (and iPhone) users are now using their devices for NEW jobs that are ill-suited or downright impossible for a desktop or even notebook.

      GPS, as you say. But also, “Siri, remind me to take the lamb chops out of the freezer when I get home tonight.” “Schedule my next haircut for December 7th at 4:30pm” (on my way out the door). Yelp, which found us a GREAT Thanksgiving dinner on a trip to NYC a year ago. These are real jobs, too.

      1. I didn’t miss anything. I was only talking about my own job, as I said in my clarification. Perhaps you missed that.

  9. Hybrids only reason for being will end when highly accurate read my lips and listen to and obey my command software for voice and gesture make keyboards and GUIs redundant.

  10. Beginning sentences with conjunctions such as “and” or “but” is a practice that should be avoided or engaged in sparingly. However, beginning three out of four consecutive sentences with the word “but” is just grating.

  11. All the Windows fanbois claim that a tablet must have a full-size USB port and expandable memory for hardware and to support businesses it must run Microsoft Office. None of Apple’s iPads run multi-tasking the way the hard-core nerds need it. They want to run a dozen apps at once to prove they’ve got a multi-tasking brain. That’s the reason why the Windows fanbois are going to be so in love with the Windows 8 Pro tablets. They think they can tuck a whole desktop computer under their arms and do everything on that tablet a full desktop computer can do. Ballmer’s minions believe any iPad is merely a crippled mess that only idiot consumers find useful. So, I’m fairly certain that an iPad Mini will never replace anything labeled Windows. Windows will live on forever in the hearts and minds of the corporate IT drones. They’ll never realize that anything else exists outside of the mighty Microsoft empire. Windows tablet… built to do everything… jack of all trades, master of none.

    1. Below$700, you might try making your argument without insulting the people you happen to disagree with. It’s actually more effective.

  12. Pc cliff is going to happen whether someone likes it or not. The real issue lies in recognising that X86 era is over and ARM era has started. Similarly, PC era has ended and tablet era has started. For Microsoft it means that Windows RT is more important than Windows 8 and Surface RT is more important than Surface Pro. Infact, Windows 8 based PC’s should be looked upon as vehicles to introduce Windows RT and Surface RT in consumer’s minds. For Microsoft it doesn’t matter that Windows 8 doesn’t sell well as long as Windows RT based Surface RT sells well. And that is allready happening. Microsoft shouldn’t get lured by the false promise of abundance of X86 software because it will not work properly in touch based environment inffact all of this software needs to be re-written for touch environment just like Microsoft Office for Android and iOS
    For Intel, it means licensing ARM and riding two horses of ARM and X86 for some time till X86 goes away

  13. On other hand… Best combo could be a laptop that stays mostly docked to a larger monitor but can move around if needed for work, then, carry the ipad mini around at all times for most work. Desktop? Don’t see the point unless you are a gamer or doing video rendering. Good thing about the ipad mini is if I can throw it in my pocket and not carry an additional bag.

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