As expected, Apple's iPad helped erode the market for netbooks, which were also squeezed from above by falling prices of notebook PCs, during the second quarter, according to the quarterly report on the laptop market by research firm DisplaySearch.

Shipments of mini-note/tablet PCs in the three months ended June 30, 2010 increased 29 percent compared to the 2009 second quarter, though they dipped 4 percent from the previous quarter. However, without the 3.3 million iPads shipped in the quarter, shipments of mini-note/tablet PCs would have been down 13 percent from the year-earlier quarter and 14 percent from the 2010 first quarter, according to DisplaySearch's Quarterly Advanced Notebook PC Shipment and Forecast Report, which also tracks portable PCs with 5-inch screens and larger.

Including the iPad, which became available in April, shipments of netbooks and tablets were up 29 percent year over year and down only 4 percent from the previous quarter. DisplaySearch predicted in June that the iPad would grab market share from netbooks, as did market research firm ABI Research in May.

"The first quarter of 2010 signaled the birth of the tablet PC, and possibly by extension, the beginning of the end of the mini-note market, especially in developed regions," John F. Jacobs, director of notebook market research at DisplaySearch, said in a statement.

DisplaySearch lumps netbooks into the same category with tablets in its research, and counted 9.8 million units shipped in the second quarter, including 3.3 million iPads, compared to 7.6 million in the 2009 second quarter.

Table 1: Mini-Note/Tablet PC Shipments and Growth (Millions)

Mini-Note/Netbook/Tablet	Q2'09	Q2'10	Y/Y Change
5.0-8.9"	0.6	0.1	-89%
9.7" (Apple iPad)	N/A	3.3	N/A
10.1/10.2" (Typical clamshell mini-notes)	7.1	6.5	-8%
With iPad	7.6	9.8	29%
Without iPad	7.6	6.6	-14%

Source: DisplaySearch Q3'2010 Quarterly Advanced Notebook PC Shipment and Forecast Report

Adding to the "iPad effect" on the netbook market were falling prices for traditional laptops, which squeezed netbooks between the thinner, lighter iPad and the greater functionality of notebooks with larger screens, DisplaySearch said. First introduced in 2007, netbooks typically sell for less than $500 and were  among the fastest growing PC categories during the economic downturn in 2008 and 2009.

Yet the price gap between the average netbook and the average 15.6" notebook PC fell to less than $60 in the second quarter, the firm said. DisplaySearch projects netbooks to continue to sell well in emerging economies to first-time PC buyers, while the iPad and other tablets will continue to take market share  in regions where PCs have high penetration rates.

The firm forecasts that shipments across the mini-note/tablet category will grow to nearly 13 million units in the 2010 third quarter and to more than 16 million in the final three months of the year.

Table 2: Mobile PC Shipment Forecast by Segment (Millions of Units)

Category	Q3'10	Q4'10	Q/Q Change	2010	2011	Y/Y Change
Mini-Note/Tablet PC (without iPad)	8.7	11.2	29%	36.0	44.3	23%
Mini-Note/Tablet PC (including iPad)	12.9	16.2	25%	49.2	69.1	41%
Ultraportable (10.4-12.5")	2.5	3.0	21%	9.7	11.8	22%
Portable (13.0-16.4")	35.8	40.5	13%	147.2	175.0	19%
Desktop Replacement (17.0" and larger)	3.7	3.9	7%	13.5	16.2	20%
Total Mobile PC Market	54.9	63.6	16%	219.6	272.1	24%

Source: DisplaySearch Q3'2010 Quarterly Advanced Notebook PC Shipment and Forecast Report

"Although Apple now holds the vast majority of tablet PC market share, the plethora of other brands that have, or will soon be launching, their own tablets are sure to capitalize on what at this point appears to be widespread consumer demand for very thin and very light devices with exceptional battery life and a primary focus on portability and content consumption," Jacobs added.