Earlier today Apple reported a sharp increase in iPad sales for the holiday quarter, a stark contrast with the declining trends for Windows PCs and also Apple Macs.

On a conference call with analysts following the results, Apple CEO Tim Cook was asked about the trends, and he made it clear that he sees the Windows market as far more vulnerable to the rise of tablets than the Mac market. He also reiterated that he believes tablets can ultimately become a bigger market than traditional PCs.

Here’s our quick transcript of his comments on the topic.

I see cannibalization as a huge opportunity for us. Our base philosophy is to never fear cannibalization. If we do, somebody else will just cannibalize it. We never fear it. We know that iPhone has cannibalized some iPod business. That doesn’t worry us that it’s done that. We know that iPad will cannibalize the Mac. That doesn’t worry us. On iPad in particular, we have the mother of all opportunities here, because the Windows market is much, much larger than the Mac market is, and I think it is clear that it’s already cannibalizing some, and I think there’s a tremendous amount more opportunity there. I’ve said for three years now that I believe the tablet market would be larger than the PC market at some point, and I still believe that. You can see by the growth in tablets and the pressure on PCs that those lines are beginning to converge.

The other thing for us — maybe not for others, but for us — is if somebody buys an iPad mini or an iPad, and it’s their first Apple product,  we have great experience through the years of knowing that when somebody buys their first Apple product, a percentage of these people end up buying another type of Apple product. If you remember what we had termed the halo effect for some time with the iPod with the Mac, we’re very confident that will happen and we’re seeing evidence of that with the iPad, as well. I see cannibalization as a huge opportunity.

Microsoft reports its quarterly earnings Thursday afternoon, providing the first detailed glimpse of how the Windows 8 launch is affecting the Redmond company’s business. Check back tomorrow for those results.

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  • http://twitter.com/fyngyrz Bennie The Bouncer

    Until or unless Apple replaces the incredibly crippled 20 files per folder, no nested folders idiocy in IOS, PCs (OSX, Windows, linux) are in no danger whatsoever.

    • n8

      You’re so right. I was in a packed apple store over the weekend and that was the only thing everyone was talking about as they left empty handed.

    • Guest

      Think about, how much effort does it really take to implement a full file system. 1 developer? They’ll do it when it’s truly needed by the consumers. Their main priority is the overall user experience.

  • http://blog.nordquist.org Brett Nordquist

    I’m trying to think how Microsoft will spin Windows 8 sales tomorrow. It could be a daunting task, no doubt.

    • dude

      Why do they have to be spun, people like you…

  • Guest

    Apple embraces cannibalization as an opportunity, Microsoft generally has viewed cannibalization as a major threat. Maybe that’s the fundamental difference that decides success or failure.

  • Guest

    I tend to agree that the iPad could replace the PC in the long run. People mistakenly think of the current iPad based on ARM and dismiss this as unlikely, but Apple can continue to extend their head start in tablets by adopting a more powerful platform once Intel (or ARM) actually bring much better CPUs to market. Apple will then develop their iPad further into a general purpose tool. iOS can always be morphed into a full OS as well. All of this holds true for Android, too.

  • yoderl

    MS earnings tomorrow will be a huge event for the company. No idea if it’ll be positive or negative, but I think it’ll be one of the most watched earnings releases from MS for years.

    • ObfuscateObfuscateObfuscate

      Prediction: they will do their best to make it look no different than any other announcement. They will look past all the concern and expectation, give numbers that are hard to discect and understand, not answer questions meaningfully, and succeed by leaving the event with no one really knowing what’s up.

      If things go south then look for Frank Shaw to go on another (or series) of drunken twitter bullying tirades like he did with Google recently.

      Don’t expect facts or reality. Because the reality is more horrible than any of them can handle. Windows RT has failed. Windows tablets have failed. Windows 8 is failing. Windows Phone is failing. Windows Surface Pro will fail at this ridiculous price point.? Windows has failed. It’s about to be relegated to the OS on cheap ass laptops and not much else.

  • Guest

    I see a huge opportunity for a competent CEO to take Tim’s job. Every day that Mr. Cook has been “running” Apple, so to speak, the company has slipped further and further into irrelevance. The company will be out of business within 5 years unless swift action is taken to restore innovation to the captaincy of 1 Infinite Loop.

    • Guest

      BS …. please spare us your FUD.

  • guest

    Cook == Ballmer. Apple announced plenty of “records” yesterday, just as Ballmer has throughout his reign. But, until Cook builds a significant new business (as Ballmer never has), he’ll just be a competent custodian (as Ballmer has been).

    • Guest

      Ten years from now I would agree. But for now it’s only been one year and he’s introduced the iPad Mini, which is successful. Certainly not earth shattering but it’s a small start (8″ to be exact). The iPhone 5 isn’t exactly a failure either. If Cook conquers one NEW market, Apple will be in good shape.

      • anonnnnn

        The same iphone that’s losing market share?

  • http://www.facebook.com/profile.php?id=100001080966933 Walden Gajo

    Now that both Microsoft and Apple has release their earnings report, what do you think now of the current situation?

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