Tablet Growth Projected To Slow PC Demand - InformationWeek
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3/3/2011
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Tablet Growth Projected To Slow PC Demand

Gartner has lowered its worldwide PC shipment forecast for 2011 from a 15% to a 10% increase from last year as tablets take market share from low-end laptops and netbooks.

Gartner has significantly lowered its forecast for worldwide PC shipments, as tablets grab sales that would have gone to low-end laptops or leave consumers undecided whether a mobile PC is really necessary.

The market researcher said Thursday that it expects global PC shipments to increase this year by 10.5% over last year to 387.8 million units. Next year, Gartner predicts a 13.6% increase to 440.6 million units. The analyst firm had forecast increases of 15.9% and 14.8% for 2011 and 2012, respectively.

There are primarily two reasons for the lowered forecast, both most prominent in mature PC markets, Gartner says. Apple and other tablet makers have done such a good job at marketing the new devices that people have either bought a tablet or are holding back on replacing their aging laptop to see whether a tablet will meet their needs just as well.

The second reason is the longstanding limitations of a laptop that manufacturers have yet to overcome. For one, many mobile PCs are still too heavy and lack sufficient battery life to be considered truly mobile. In fact, many laptops are seen as nothing more than a transportable desktop, while the more portable tablets have become increasingly useful as the number of apps available for the devices increases.

The battle between laptops and tablets will intensify in the second quarter of this year, when many manufacturers are expected to launch their challengers to the market leader, the Apple iPad. The onslaught of the thin-and-light slates will likely hurt sales of netbooks and low-end PCs the most, Gartner says. That's because both do not do a whole lot more than what can be done on a tablet, namely check email, surf the Web and communicate with friends via social networks.

Eventually, the market for PCs and tablets is expected to settle to where people will buy one device or the other, depending on their needs. "For a long time the computing universe was PC centric," Gartner analyst George Shiffler said in an interview. "That era is definitely done."

The new era will have a more defined space for the mobile PC. People who like to edit home movies or use spreadsheets and other productivity applications will opt for a mobile PC. Others who only want to watch video, read electronic books and magazines, or surf the Web will find the tablet more convenient.

"By the time this all plays out in three or four years, the mobile PC will take a little bit of a hit, but it's still going to be hanging in there as an important part of people's device collection," Shiffler says.

Gartner's take is not universally accepted. Others believe the impact of tablets will be much more dramatic. Goldman Sachs expects tablet sales to cannibalize PC sales at a rate of 33% to 35%, leaving the PC market with just 8% growth next year.

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