Micron: Apple iPad, tablets ding PC, notebook demand

Micron: Apple iPad, tablets ding PC, notebook demand

Summary: There has been a lot of debate recently over whether Apple iPad and the slew of tablets on deck are hampering PC and notebook demand. The data is largely inconclusive for now. However, Micron Technology CEO Steve Appleton sees some substitution effect.

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There has been a lot of debate recently over whether Apple iPad and the slew of tablets on deck are hampering PC and notebook demand. The data is largely inconclusive for now. However, Micron Technology CEO Steve Appleton sees some substitution effect.

On Micron's fourth quarter earnings conference call (transcript), Appleton noted that the PC demand outlook for the fourth quarter has come down. That's not too surprising given profit warnings from the likes of Intel and AMD, but Micron has interesting perspective as a memory producer. PC makers are cutting back on their fourth quarter optimism.

The big question is whether tablet demand has anything to do with slowing PC demand. In many ways, you could argue that tablets like the iPad represent netbooks done right. And it's not surprising that tablets may be stealing a few notebook sales---even though tech executives are skittish about making any proclamations. Piper Jaffray analyst Gene Munster has already referred to the iPad as the Mac for the masses. Not all of those iPad sales will be incremental.

Appleton said:

We did see softening towards the end of our fourth quarter in our notebook, desktop, commodity DRAM businesses and forecast through the back half of this calendar year.

It appears that some of the demand is being driven by unstable consumer sentiment. Some of the softening in the desktop and notebook space, I think, can also be attributed to the success of the tablet PC category. And the smartphone segment is also growing.

For Micron, the popularity of tablets is a bit tricky to navigate. Sure, more devices means more memory consumption. However, tablets consume memory in smaller chunks. Appleton said that it is seeing weakness in PC memory, strong memory demand in tablets and strength in servers. Appleton outlined the dynamic:

The stronger that tablet PCs are, the more pressure it puts on DRAM because less bits consumed in those compared to some of the more traditional notebooks or desktops. I think there is some there is some truth to that, although we also believe there's some incremental demand that comes from that.

But the real win for Micron may be the memory consumption on servers. As more tablets are sold, more data resides in the cloud and on remote servers. Those servers need memory. Appleton continued:

There's a much greater preference to interact with the network on an iPad than there is on the iPhone, and it is probably even if they have both, for obvious reasons, because of the quality of the display, etcetera.

Every time that that happens, it means that more data has to be moved and stored somewhere, and the more that that happens, the more servers, the more networking, the more infrastructure you need in order for that to happen.

Oddly enough, the infrastructure business is better and actually pretty good compared to what we're seeing happening in the PC business. So there's a balancing act that happens there.

Micron seems to be balancing the cross currents relatively well, but its fourth quarter earnings of 32 cents a share on revenue of $2.49 billion fell short of Wall Street expectations.

See: All notebooks and tablets content

Topics: Hardware, Apple, iPad, Laptops, Mobility, Tablets

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19 comments
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  • All these analyses don't make any sense to me....

    ... If <a href=http://appadvice.com/appnn/2010/10/ipads-sold/>Apple will be found to have sold about 3.8 to 6 million iPads last quarter</a>, how can this tiny amount of sales be displacing notebook sales several times its size?
    P. Douglas
    • RE: Micron: Apple iPad, tablets ding PC, notebook demand

      @P. Douglas Let's revisit in a year...they are projecting sales of 45 million iPads next year, and I bet that's a lowball figure especially if iPad 2.0 delivers with demand (cameras, faster processor, more RAM, more storage, same slim factor, HDMI/USB)....

      I'd throw the number at 60 million if that occurs.
      cyberslammer
      • No Way...

        @cyberslammer

        iPad sales are going to be slaughtered by the slew of less-expensive, better-spec'd, and more flexible systems running Chrome, Windows, and other far more capable OS's.
        trickytom3
      • omg

        @trickytom3
        you mean like the "less-expensive, better-spec'd, and more flexible systems" that have been around for almost a decade now, that no one bought?
        banned from zdnet
      • RE: Micron: Apple iPad, tablets ding PC, notebook demand

        @trickytom3 Sorry, you're about as credible as Loverock...and you'll be wrong..as you have been on iPad...as you have been on iPhone...as you will be on Windows Phone 7.

        You're an insult to CIOs everywhere...if you were one.
        cyberslammer
      • RE: Micron: Apple iPad, tablets ding PC, notebook demand

        @cyberslammer While I agree with you that all of the 'additions' you think will come to the iPad would indeed finally push me (and many others) into purchasing one, I don't think we will see Papa Steve allowing all of that [i]ever[/i], much less any time soon. Especially USB or possibly SD. Apple would lose too much control over the device if they did that.

        To be honest, I might buy one now if I could print directly from it. My Droid can print wirelessly to my Brother MFC printer any document that I have an app to open, using Cortado Workplace, and it can print the pics I take using an app from Brother wirelessly. IF Android can do it, iPad should be able to do it.

        I heard there are some apps coming to allow printing from the iPad, but I think that Apple should be the one integrating it into the iOS (and so should Google into Android), not leaving it to the app developers.

        My wife is itching to get her hands on an iPad. I keep her away from BestBuy at all costs (we don't have an Apple strore anywhere close by) until it has more features.

        As far as the iPad cannibalizing Netbook/Notebook sales, I am sure there is some of that happening, but I would like to see some hard numbers on WHO is buying the iPad and for what. Is it a second, or only, computer. I doubt that there are a lot of people buying it as their first and only device, especially if they are not computer savvy.

        It is going to be interesting to watch, that's for sure.
        babyboomer57
      • RE: Micron: Apple iPad, tablets ding PC, notebook demand

        @cyberslammer

        <i>"I heard there are some apps coming to allow printing from the iPad, but I think that Apple should be the one integrating it into the iOS"</i>

        They've always been apps that does this on the iPhone, iPod Touches and iPad, as well as specialized apps from Epson, Cannon and others. But Apple is implementing printing in the next iOS update (AirPrint).

        http://www.apple.com/pr/library/2010/09/15airprint.html
        http://www.youtube.com/watch?v=PC7QkvbubWI
        dave95.
      • RE: Micron: Apple iPad, tablets ding PC, notebook demand

        Double (stupid comment system)
        dave95.
      • RE: Micron: Apple iPad, tablets ding PC, notebook demand

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        Juliety
  • RE: Micron: Apple iPad, tablets ding PC, notebook demand

    Don't be mentioning things like the iPad stealing netbook sales. Steve Ballmer and his Windows fanbois will be up in arms hearing such nonsense. Everyone knows that netbooks are one of the finest computing platforms the computer industry ever created and that even a $200 netbook is about 10X better than the most expensive iPad because the netbook runs Windows, has a keyboard, USB ports and runs Flash. Hell, the netbook is nearly perfect. It does everything (although not all that well) and costs almost nothing. A netbook is such a sweet package that Windows fanbois extol its many virtues. The Wintards say the iPad is just a fad product and should peter out by the end of the year then the netbook will be back on top for good. Awesome goodness reigns supreme. Haaaaha.
    ConstableOdo
    • and you forgot ...

      @ConstableOdo
      the ipad is just a toy, only for consumption, is strictly not for business and you can't use a stylus with it!!! (which of course is all bs)
      banned from zdnet
  • only one tablet

    there is only one tablet that is selling right now, which is the ipad. if the notebook / netbook market is affected by the overwhelming demand for the ipad (which i think is partly true), then it is affected because people buy the ipad. not some vaporous "other tablets" the blogosphere desperately tries to talk into existence. newsflash, they don't exist. there are no other tablets, only some vaporware concepts which persistently refuse to materialize month after month.
    banned from zdnet
  • Not just Micron is saying iPad's killer impact

    Maximum PC Aug:

    "Asus only managed to sell 1.5 million netbooks in the second quarter, a drop of 100,000 units over the first quarter and short of the company's expectations. As a result, Asus president and CEO Jerry Shen recently told investors that Asus had to downward adjust its target shipments for the third quarter, which he blames on competition from Apple's iPad."

    Best Buy's CEO of course was reported to have said by Wall Street Journal that 'iPad eating 50% of notebook' sales' which he later (probably after his PC suppliers yelled at him) said was misquoted, although significantly Best Buy refused to give new numbers.

    I won't even bother with all the financial analyst types (Morgan Stanley etc) who look at profits and market share who say basically the same things.
    Davewrite
    • RE: Micron: Apple iPad, tablets ding PC, notebook demand

      @Davewrite How about we include numbers from the more popular netbooks before we make a conclusion. Asus, while a nice netbook, is in no way even close to number one. HP and Acer netbook sales make Asus almost irrelevant in the big scheme of things. Oh, and don't forget Dell, they sell a slew of them, too.

      I would love to have a nice tablet, Apple or otherwise. When one comes out that has the features I want, I will get one. Maybe that will be the iPad2, maybe it will be an Android or Windows tablet. I won't know until I see the features, and the price I am willing to pay for them.

      For now I will just chug along with my HP TX1000 convertible tablet/notebook. If it weren't for the weight and short battery life I would be happy with it. We'll see who wins my money in the next 6 months or so.
      babyboomer57
  • RE: Micron: Apple iPad, tablets ding PC, notebook demand

    In any any case, all this is going to be good news for ARM in its battle against Intel (at least until medfield comes out)

    It is also going to be good for OS's that have open-source, unix-like kernels, in their fight against Windows.
    Eduardo_z
  • Are iPads the ONLY reason for reduced PC desktop, laptops & net book sales

    Apple desktop and notebook sales have not been adversely reduced by iPad sales (although there have been some reports that low end MacBook sales are very slightly under expectations.)

    Could it be that consumers are switching to a more unified computing ecosystem that combines the OS, hardware, app availability and customer support by Apple than simply a mere hardware purchase "one to one" substitution between a tablet and a PC?

    My opinion is that the iPad (or any tablet) is just an accessory to a particular computing environment and that the opinion that iPads (or tablets) by themselves are reducing overall PC sales is simplistic at best but more likely just flat out wrong.
    kenosha77a
  • RE: Micron: Apple iPad, tablets ding PC, notebook demand

    It's great if iPad 2 is coming ! Wish they will include a built in VNC or RDP client so that we can access all the Mac apps or Windows apps when required thru ThinServer

    http://www.aikotech.com/thinserver.htm
    bojanwojan
  • The people at Micron and other analysts must be operating in a vacuum

    because they're not looking at all the data from which to draw their conclusions.<br><br>The biggest factor affecting PC/netbook/notebook/tablet sales right now, is..... wait for it....<br><br>Ta-da....<br><br>The economy!<br><br>People are holding on to what they have longer than they normally would have, and they're not going to upgrade or buy any new computers unless they have to, and then, only if they can afford it.<br><br>And most people, if they can afford it, would not be buying a crippled "computer", aka: iPad, when for the same money they could get a very well equipped laptop or desktop or perhaps a couple of netbooks. Most people don't need a portable consumption device.
    adornoe
  • RE: Micron: Apple iPad, tablets ding PC, notebook demand

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    jocaso