updated 09:50 pm EDT, Wed July 27, 2011
UBS analyst ups tablet targets, lowers PCs
UBS analyst Maynard Um saw tablets disrupting PCs more than previously thought in a new investment note on Wednesday. He upped predictions for tablets in 2011 from 55 million to 60 million based mostly on Apple's skill at selling the iPad, shipments of which he saw growing from a previously predicted 32.3 million to a much larger 39.9 million, or about two thirds of the entire space. PC growth, which Um once saw as 6.3 percent, was now only going to hit 4.5 percent, both from the expected impact of tablets on netbooks but also because of slow growth outside of business buyers.
Apple in 2012 would still hold the majority of the tablet market, the analyst saw: although he saw tablet shipments up to 90 million from the 80 million he had forecast earlier, 53 million (59 percent) of that would come from iPads. Um foresaw a rapid increase much like that of the LCD TV, but due to people finding use cases for tablets, not because of dropping prices.
The revisions partly came from access to information. UBS' incidental checks showed that, while shipments of rivals like the BlackBerry PlayBook and HP TouchPad were healthy, there was "soft sell-through" leaving a significant number of these on shelves. A few Android tablet makers, like ASUS and Samsung, were faring better, but not as well as Apple.
Netbooks, in the meantime, were going largely as long-term thinkers thought, Um said. Many buyers and PC builders were tricked into believing the low prices and burst of early demand were a sign of a permanent market, but the market was bound to settle down. Inherently limited processors and the reach eventually slowed them down, leading buyers to either jump to traditional low-end notebooks or to tablets. At the start of the year, Microsoft acknowledged that netbook revenue collapsed by 40 percent in less than a year of the iPad's availability.
The analyst didn't see tablets repeating the same pattern. "Unlike the netbook market, we see the tablet market as being a much more viable market unto itself, and maintain our view that those that have broader ecosystems [for content and utility]... will be more likely to succeed," he said.