iPad, tablets may be slightly cannibalizing notebook sales

Jon Peddie Research (http://www.jonpeddie.com), a research and consulting firm for graphics and multimedia, has announced its estimated graphics chip shipments and supplier’s market share for the third quarter of 2010 (Q3’10). Tablets such as the iPad seem to be having some effect.

Overall graphics chip shipments were an unseasonably 1% down from Q2’10 due to the 8.4% drop in notebook sales despite an 8.4% growth in desktop sales reflecting the increasing impact of the notebook market. The possible cause for the decline in notebook sales could be the iPad, and the related shift from netbooks.

Embedded graphics processors from Intel showed strong growth, up 50% from Q2’10, while total IGPs shipments from all vendors slowed to a modest 1.4% growth quarter-to-quarter.
Overall, market shifts occurred for all vendors even though the quarter-to-quarter total shipments were basically flat.

AMD attributed its slip in market share to weakened demand and original equipment manufacturers letting their graphics processing unit inventory run down to avoid being stuck with leftover processors. Due to real and perceived shortages in supply, some customers shifted their purchases to rival Nvidia, says NPR.


There may have been some deemphasis on GPUs after a significant weakening of the Euro, with laptop makers settling for cheaper, integrated graphics instead. AMD graphics revenue decreased 11% sequentially but increased 33% year-over-year. Intel reported “revenue from client chipset and other” of $1.75 billion up from $1.68 billion in Q2.

“No one knows how much cannibalization there is in tablets, but the numbers are relatively small,” says Intel President and CEO Paul Otellini.

About eight million iPads shipped in the third quarter, which is 11% of an estimated 70 million notebooks and netbooks over the same period. Intel’s Atom processor revenues were down 4% in Q3, which some observers are attributing to cannibalization by tablets. In June, Intel announced it would make new chips for tablets, and previewed “Oak Trail” tablets scheduled for release in 2011.