Nov 29, 2010 (10:11 AM EST)
iPad, Smartphones Dragging Down PC Sales

Read the Original Article at InformationWeek

Gartner has lowered its 2010 and 2011 global forecasts for PC shipments, saying sales will be lower than expected due to growing interest in Apple's iPad and other tablet computers. The research firm said Monday that PC makers are on track to ship 352.4 million units this year, up 14.3% from 2009. Gartner had predicted in September a 17.9% increase.

Gartner also lowered its 2011 forecast to 409 million units, a 15.9% increase from this year. The firm's earlier estimate was for an 18.1% increase.

Gartner analyst Ranjit Atwal said the lower estimates are based on slower consumer sales. The drop is "due in no small part to growing user interest in media tablets such as the iPad."

"Over the longer term, media tablets are expected to displace around 10% of PC units by 2014," Atwal said in a statement.

Because the majority of potential challengers have yet to reach the market, the iPad is the biggest cause among tablets of slowing PC sales. The flat computer with a 9.7-inch diagonal touch screen accounts for more than 95% of the consumer tablet market today. That percentage could change as tablets hit the market from Hewlett-Packard, Samsung Electronics, Acer and others.

Along with tablets, future smartphones, which are expected to be more capable than devices in the market today, will also hurt PC sales, Gartner said. Such non-PCs offer better on-the-go computing. While it would seem that laptops would be most affected by these ultra-portable devices, desktop sales also will be impacted, as cloud-based applications make it possible to use tablets and smartphones to do tasks that once required a PC.

Gartner analyst George Shiffler blamed the PC industry for current trends, saying it has focused too much on driving sales through lower prices, and not enough on innovation. "As the PC market slows, vendors that differentiate themselves through services and technology innovation rather than unit volume and price will dictate the future," he said.

However, the new generation of mobile devices is here to stay, Gartner said, and businesses and consumers will look to these less expensive devices to do more mobile computing, thereby waiting longer to replace PCs as their importance diminishes.

Other factors affecting the PC market include expected purchasing trends in emerging markets, where PC sales are growing much faster than in mature markets. Gartner believes there is a good chance that consumers in emerging markets will leapfrog PCs in the future and move directly to alternative computing devices.