Google's first store opens MacKenzie Scott's big donation Grand Theft Auto Online ends for PS3, Xbox 360 Pink Floyd disses Zuckerberg Ant-Man 3 Amazon Prime Day's early deals

iPad, tablets expected to dampen Netbook sales

New tablets will steal some market share away from standard Netbooks, but demand will stay strong for portable PCs overall, says DisplaySearch.

The appeal of the iPad, HP's upcoming Slate, and other tablets will take a bite out of Netbook sales this year, according to a report released Monday by DisplaySearch.

Driven by the iPad, the tablet market will see dramatic gains this year, taking market share away from clamshell-style Netbooks, says DisplaySearch's "Quarterly Notebook PC Shipment and Forecast Report."

Most of the growth, especially for the iPad, will come from North America and Western Europe, where Apple has set up key distribution lines and created agreements with content providers. Overall, consumers are expected to pick up around 5 million tablets this year, forecasts DisplaySearch.

But don't count out the Netbook just yet. Traditional clamshell type Netbooks, or mininotes, are expected to continue to entice customers as their average selling prices have dropped from $400 to slightly less than $300. The Apple iPad, which will account for most tablet shipments this year, starts at a price of $499 and moves up to more than $800. The low prices of Netbooks will remain appealing to people looking for a second or third PC and help lure in first-time PC buyers in emerging markets.

Ironically, though, the low prices of Netbooks will continue to result in thinner margins and lower sales numbers for their manufacturers, component suppliers, and retailers, says DisplaySearch. With its popular App Store and rich array of content, the iPad can generate healthier margins and higher sales for Apple, its component makers, and retail stores.

The portable PC market, as defined by DisplaySearch now includes notebooks, Netbooks, and tablets. As such, the growth of Netbooks and tablets led by the iPad will help the overall market reach sales of 215 million units and $117 billion in 2010, a return to 2008 levels. Of that, Netbooks and tablets will contribute growth of around 28 percent and generate $13.3 billion in revenue this year.