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Gartner: PCs shipping in smaller numbers due to iPad effect

updated 10:00 am EST, Mon November 29, 2010

Gartner lowers 2010 PC estimates due to iPad

The iPad's influence on the market has led to a direct drop in the estimated sales for this year and next, Gartner said today. It lowered its estimates for PC shipments in 2010 down to 352.4 million as a direct result of tablets; the number was still up 14.3 percent from last year but down from a 17.9 percent jump estimated as recently as September. Analysts also dropped their guesses for 2011 from 18.1 percent growth to 15.9 percent for similar reasons.

Gartner didn't expect tablets to completely replace computers, but it saw as many as 10 percent of PCs being converted to tablets by 2014. Research director George Shiffler directly accused Windows PC makers of not anticipating the tablet market and of focusing too much on cut-rate systems where Apple and a handful of others were focusing on features and quality right as they were becoming necessary.

"PCs are still seen as necessities, but the PC industry's inability to significantly innovate and its overreliance on a business model predicated on driving volume through price declines are finally impacting the industry's ability to induce new replacement cycles," the director said. "As the PC market slows, vendors that differentiate themselves through services and technology innovation rather than unit volume and price will dictate the future. Even then, leading vendors will be challenged to keep PCs from losing the device 'limelight' to more innovative products that offer better dedicated compute capabilities."

Tablets were most likely to bracket computers at both the low and high end. "Mature" markets were more likely to have buyers that could afford to skip computer refreshes more often in favor of a tablet, while those in developing countries might simply jump directly to a tablet for the lower price. Apple is less likely to play a role in these areas since its devices are still dependent on a computer to get setup and to sync.

Android is likely to get significantly more share in 2011 after Acer, HTC, LG and Motorola all enter the tablet arena, but the effect on 2010 can be attributed almost exclusively to Apple, which as of the summer had 95.5 percent of the tablet category, even when including the entire Windows tablet PC industry. The Galaxy Tab has moved 600,000 units but is already estimated by Samsung to be on the decline.



By Electronista Staff
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Comments

  1. iphonerulez

    Fresh-Faced Recruit

    Joined: Nov 2008

    +1

    I'm a bit puzzled by one analyst saying

    that iPad sales may not reach projected sales of 6 million, yet Gartner believes iPad sales are cutting into PC sales. The iPad must not be cutting into PC sales by that much for now since PC sales losses would be in the millions. Maybe consumers are just not buying anything or Apple shouldn't have much of a problem selling six million iPads for the current quarter. I've heard talk of iPad sales even cutting into TV sales, so I don't know why they're not boosting iPad sales more. I'm guessing WS is looking for 13 to 14 million iPads being sold in total for this year. That's a pretty high amount to achieve for a product that's been in production for less than a year.

    What is amazing is that Apple has cornered the tablet market with the iPad and yet if the iPad doesn't meet the highest sales expectations, Wall Street will consider it a fail for Apple and share value will suffer even though Apple is beating the rest of the industry. That's a bummer.

  1. junkie

    Fresh-Faced Recruit

    Joined: Oct 2001

    +2

    PC decline is not device makers fault

    There are a few factors in play here:

    1) New CPU intensive applications are not driving demand for new CPUs. To the contrary, the move to the cloud takes the burden off the client.
    2) Bad economy means that fewer people are buying. Those who are buying are premium shoppers and they are flocking to Apple.
    3) If you want something new right now, an iPad looks like more fun than a new PC. It's a new experience. If your PC works at all better to expand in a new direction, a new category and keep going with your 3 yo PC.
    4) At least until Android hit, PC device makers have been subject to the direction that MSFT set. Microsoft had it's own failing direction for a tablet. PC makers invested in that vision and lost.
    5) Seems like some device makers have tried to differentiate but it has failed because at the end of the day they have to compete with all the Windows machines out there. Apple can impose premium hardware because it also has a lock on the OS. PC makers did not have that option the way that Apple did.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    yawn

    Another day, another analyst pulling numbers from the sky and analysis from their butts.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -1

    Re: I'm a bit puzzled by one analyst saying

    I'm a bit puzzled by one analyst saying that iPad sales may not reach projected sales of 6 million, yet Gartner believes iPad sales are cutting into PC sales.

    First, they're analysts. They tend to not know what they're talking about. And they're all different, too.

    And if half of 5 million iPad sales were going to buy a PC instead and chose the iPad, that's cutting into PC sales, isn't it?

    I've heard talk of iPad sales even cutting into TV sales, so I don't know why they're not boosting iPad sales more.

    Well, maybe because (a) it's just 'talk', or (b) you're trying to read x and assume it means y. Or looking at the cause/effect backwards. You seem to be thinking that "iPads are cutting into laptops and TV sales, so more people must be buying iPads!". What it could just as easily be (and more likely, if the numbers you state are correct) is that people who bought iPads are now deciding NOT to get a new TV or laptop. That is, it isn't the consumer getting the iPad instead of TVs or laptops, but the consumer getting the iPad and then deciding they don't need/want the TV or laptop. Thus, sales are hurt in the other categories, but not due to an explosion of demand of the iPad over what is expected.

    And, yes, it is all just supposition and hypothetical scenarios. I was just pointing out that the drop of one doesn't have to mean an increase of the other, even if all other factors (price, economy, etc) were seen as non-issues.

    What is amazing is that Apple has cornered the tablet market with the iPad and yet if the iPad doesn't meet the highest sales expectations, Wall Street will consider it a fail for Apple and share value will suffer even though Apple is beating the rest of the industry. That's a bummer.

    Again, you're taking one fact and thinking that it means something. Apple has 'cornered' the tablet market, but it isn't saying much since there currently is no tablet market, and the existing tablet market was even smaller (wasn't the excuse posters here would say about Apple not making a tablet was that it was a niche market?). So cornering a market they basically created, by itself, means nothing. If Apple doesn't meet an expected 6 million iPads (again, taking your numbers), investors may perceive this as the tablet market already leveling off. (Depends on whether Apple mentions they can't make them fast enough, you know). And having a 95% market share of a non-growing market means expected future revenues from the tablet market will be expected to be far less than what investors are currently betting on. As such, one reason for the stocks to take a killing if the iPad doesn't sell well.

    Going on that, if Apple can't meet demand, there may also be the fear that this will be an extended problem that will hinder short-term sales more than expected (for I'm sure if investors are expecting 12 million for this year, they're expecting 20 million plus for next year) and the stock price will drop (as it would be priced under current guesses and such that won't be hit).

    Microsoft has cornered the 'large table-sized touch-screen computers' with their Surface product. But that doesn't mean it

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