Could the iPad 3 start to cannibalize TVs sales?

It's quite possibly happening already.
Written by Adrian Kingsley-Hughes, Senior Contributing Editor

Could the iPad 3 become the next big entertainment device, and could its success start to cannibalize TVs sales?

Patrick Moorhead over on TechPinion believes that this will happen sooner rather than later:

At some point in the near future, the iPad will have a better display and will be lighter than its predecessors, which drives me to the conclusion that the next generations of the iPad will start to rapidly cannibalize HDTVs, particularly second or third sets.

Moorhead goes through a number of valid reasons why he believes that TVs will be affected by the iPad, and concludes as follows:

I believe the future iPad will take a big chunk of the secondary TV and even delay new primary TV purposes through consumer rationalization that it can serve as the primary “personal TV” device and I expect to start to see the effects in the holiday 2012 selling season.

I agree with Moorhead, but I'm coming to this conclusion via a different route.

First, it's quite possible that post-PC devices like the iPad are already cannibalizing TV sales. After all, the big names in the TV business are already experiencing bad times as they find it increasingly difficult to persuade people to part with their cash in exchange for a new TV that's only marginally better than the TV they already have.

TV is no longer the exciting consumer electronics device they once were. Devices such as smartphones and tablets are now what is hot, and since people only have a finite amount of disposable income, spending on these post-PC devices will mean less spending on traditional items.

Another factor that's changing is what people watch. Regular TV viewing is giving way not only to viewing on demand but also other entertainment outlets, such as YouTube.

While many TV makers have tried to go after this market with smart TV, they've been unsuccessful, and I see this trend as continuing simply because you don't need a big, expensive, fixed TV to be able to view web content. You can watch it just as well on a PC or even a tablet. Once again the trend continues of replacing big, impersonal devices, with smaller, more personal gadgets.

These post-PC devices aren't replacing the main 'family' TV, but they're certainly compelling when it comes to secondary sets. Not only do you get a device that will handle a broad range of media, but will also let you do a myriad other things that you can't do (or certainly can't do easily) with a TV, such as checking your email, browsing the web, playing games, and more. Convergence devices (that bring together a broad range of features) outmanoeuvre one-trick ponies.

There continues to be a market for TVs, but I don't think that TV makers have yet accepted that the boom in sales as people replaced old CRT-based units with flat-screen panels was short-lived and that owners keep their sets for about five years (unless the set dies, which might result in a new sale, but it's hardly a good advert for the dead set's maker) as opposed to the couple of years for consumer electronics such as PCs and smartphones.

Size doesn't really drive TV sales any more because the size bumps are only relevant if you have an enormous room to put the set it. Most people have a finite space to fill with a set, and they go out armed with this information and a budget.

The sort of person who goes out yearly to buy the biggest and best TV is just as much of an outlier as the gamer who goes out buys a new PC (or upgrades their existing one) as soon as a new CPU or GPU comes out. There's money in this market for sure, but any company that mistakes this demand for a mass-market demand is asking to lose money.

Post-PC devices claim another victim.

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