iPad sales hurting tablet's competitors

With the iPad, Apple kicked open a door that rivals Asus, Dell, Hewlett-Packard, Research In Motion and Motorola, among dozens of others, and hurried through. But more than a market for tablets, Apple may have simply created a market for the iPad.

According to a June 1 report from JPMorgan Chase, while Apple's slim beauty has enjoyed robust sales figures — Apple sold 7.33 million iPads during its first quarter and 4.7 million during its second — its rivals are this year lowering production by as much as 10 percent compared to 2010's numbers, The New York Times' Bits blog reported June 2.
Among the iPad rivals that have "failed to gain traction," states the report, are "Asustek's Eee Pad Transformer, Motorola's Xoom, Research In Motion's PlayBook and Samsung's Galaxy Tab."

"We still think a tablet bubble burst could occur later this year," states the report, though JPMorgan analyst Mark Moskowitz added that the lowered production numbers have since helped to temper concerns.

Arguably the downside of strong iPad sales is the possibility that the iPad could eat into Mac, and possibly iPhone, sales, as Gleacher & Company Analyst Brian Marshall wrote in a June 2 research note, noting that it's "what the Bears will point to."

"The iPad has successfully integrated the functionality of a slimmed down notebook into a media player form factor and has effectively rendered a significant portion of the Mac (and potentially the iPhone) product family obsolete," Marshall continued. "This presents a serious problem as iPhones and Macs generated 64% of Apple’s total revenue in CY10."

Historically, Apple has found the "problem" of strong iPad sales literally laughable.

During Apple's first-quarter earnings call Jan. 18, Apple CFO Tim Cook remarked that if a company were trying to build a PC that could compete with the iPad, they couldn't do better than the MacBook Air.

He added that if tablets are cannibalizing PCs, the Hewlett-Packards and Acers of the market — which have far larger PC market shares — have far more to lose than Apple.

"Cannibalization isn't anything we spend one minute thinking about over here," Cook said. "We're busying building the best tablet we can."

As for the iPad cutting into iPhone sales, Apple is rather savvy about making up the difference. Since March, Apple has reportedly boosted its number of iPhone carrier partners from 186 to 200.

“There has been some investor angst over how near-term iPhone shipments could trend if the iPhone is not refreshed until late this year,” Goldman Sachs Analyst Bill Shopes wrote in a recent report, according to All Things D. “But we believe bears are failing to consider the continued underlying demand momentum for the iPhone 4, its international strength, and most important, continued carrier expansion.”