Apple's iPad Could Cannibalize MacBook Sales by 2017

Tablet sales are expected to grow from 121 million units in 2012 to 416 million units in 2017. This news, which comes from an NPD DisplaySearch report, coincides with expectations that sales of Apple's AAPL leading tablet, the iPad, will continue to rise. The iPad is expected to maintain its dominance within the tablet market even though it lacks one popular feature. Apple will receive some new competition this month when Google GOOG releases its first branded tablet, the Nexus 7. Referred to as a $200 iPad-Killer, the Nexus 7 helped Google humiliate the competition during its press event last month. Microsoft MSFT is expected to draw attention away from the laptop market when Surface, the company's first tablet, is released. Designed for business and consumer users, Surface may be the first tablet that can compete with the iPad in terms of features and functionality. Regardless, some critics fear the device -- which could cost as much as $800 -- is just another Zune. One analyst even went as far as to say that Microsoft should give it away for free. Despite the release of new tablets from the tech industry's most prominent players, Apple is still expected to lead the market. With a starting price of $499, the iPad is one of Apple's most profitable devices. By growing the tablet market, however, Apple has shifted consumer preference from notebooks to tablets. Thus, Apple may inadvertently cannibalize MacBook Air and MacBook Pro sales over the next five years. As long as consumers are buying Apple products, Apple wins. But while MacBooks range in price from $999 to $2,799, iPads are considerably cheaper. The least expensive third-generation iPad sells for $499; the most expensive model (which features Wi-Fi, 4G LTE and 64GB of memory) retails for $829. Consequently, Apple's revenue could decline if the iPad cuts into sales of the MacBook market. Follow me @LouisBedigianBZ