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You are here: Home / Mobile Industry News / Tablets, Cloud Slow PC Sales Growth
Tablets, Cloud Expected To Reduce PC Sales Growth
Tablets, Cloud Expected To Reduce PC Sales Growth
By Mark Long / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
NOVEMBER
29
2010
Gartner reduced its PC sales growth forecast for the year by more than 2.5 percent Monday, citing expectations of weaker consumer demand. What's more, the research firm's analysts see several disruptive forces on the horizon that could further reduce PC demand.

Gartner expects many consumers and businesses to refrain from buying PCs because of slower income growth, weaker employment gains, and economic uncertainty. But perhaps the biggest factor that will impact PC sales is the growing demand for Apple's iPad and other tablet computers, which the research firm's analysts believe will lead to the displacement of about 10 percent of all PC sales by 2014.

The iPad is already affecting PC sales, but not because it is replacing traditional computing platforms, noted Mika Kitagawa, a principal research analyst at Gartner. "The iPad is competing against the consumer's wallet," Kitagawa explained. "Their disposable income might be used for additional PCs at home if iPad did not exist."

More Alternatives Ahead

Apple's iPad has reduced the attraction of purchasing additional PCs for the home, Kitagawa observed. "These are not primary PCs for the user, but additional machines," she added. "Media tablets like iPad can do good enough work as an additional device at home."

Consumers are extending the PC life cycle in order to secure their budgets for new devices such as iPad, she observed. "As a result, PC sales will slow down," Kitagawa said. Netbooks fall within this segment, she added, and therefore netbook sales will be affected as well.

Traditional PC makers are also feeling competition from the latest round of smartphones sporting advanced computing capabilities that enable users to consume multimedia content on the go. "These devices will be increasingly embraced as complements, if not substitutes, for PCs where voice and light data consumption are desired," said Gartner Research Analyst Raphael Vasquez.

Additionally, Gartner expects to see business demand for traditional desktop PCs to begin waning in 2012 because of the increased availability of cloud-computing alternatives in the enterprise space. Though the research firm doesn't expect hosted virtual desktops to impact the professional PC market right away, in the long run the new technology is expected to reduce desk-based PC shipment growth, Vasquez observed.

"It is likely that desk-based PCs will be adversely impacted over the long term by the adoption of hosted virtual desktops, which can readily use other devices like thin clients," Vasquez said.

Gartner expects to see an extension of average PC life cycles as users spread traditional PC functionality over a variety of complementary devices. "This will end up extending the lifetimes of PCs because there will be less need to replace them as often," the firm's analysts said.

PC Industry Shortcomings

Apple's iPad media blitz at the beginning of this year played a major role in helping the company bring the device's innovative features to the attention of consumers worldwide. According to Gartner Research Director George Shiffler, the PC industry has only itself to blame for failing to significantly innovate as well as promote new products and capabilities that could capture consumer interest.

The PC industry has also over-relied on a business model predicated on driving volume through price declines and is now suffering the consequences, Shiffler observed. Both shortcomings are impacting the industry's ability to induce new replacement cycles, he 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," Shiffler explained. "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."

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