GARTNER REVISES GLOBAL PC SALES, UP BY 14.3%, SAYS TABLET PC'S WILL CUT INTO REGULAR PC SALES

Gartner has cut its estimates on PC shipments, saying tablets are increasingly serving as substitutes for PCs for light data consumption. The firm said worldwide PC shipments were on pace for 352.4 million units this year, up 14.3 percent over last year but down from projected growth of 17.9 percent just two months ago. Similarly, worldwide PC shipments in 2011 are expected to hit 409 million, a 15.9 percent increase over 2010 but down from an earlier estimate of 18.1 percent growth.

The rapid revisions suggest that the PC market, while still growing, is in flux as it deals with the growth in demand for tablets. Just last month, Gartner reported that 3rd Quarter PC sales grew by just 7.6 percent in what is normally a strong period. Gartner said over the long term, media tablets are expected to displace around 10 percent of PC units by 2014. The research firm said PC manufacturers, who have relied in the past on pricing declines and pushing volume, will need to add more services and technology innovation to stay competitive.

Table 1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 3Q10 (Units)

Company	3Q10 Shipments	3Q10 Market Share %	3Q09 Shipments	3Q09 Market Share %	3Q09-3Q10 Growth %
HP	15,431,749	17.5	15,513,420	18.9	-0.5
Acer	11,527,716	13.1	11,726,586	14.3	-1.7
Dell	10,816,474	12.2	9,908,099	12.1	9.2
Lenovo	9,140,778	10.4	6,871,379	8.4	33.0
Asus	4,793,186	5.4	3,911,263	4.8	22.5
Toshiba	4,695,600	5.3	4,014,945	4.9	17.0
Others	31,896,091	36.1	30,106,333	36.7	5.9
Total	88,301,595	100.0	82,052,026	100.0	7.6

Note: Data includes desk-based PCs and mobile PCs.
Source: Gartner (October 2010)

Table 2
Preliminary U.S. PC Vendor Unit Shipment Estimates for 3Q10 (Units)

Company	3Q10 Shipments	3Q10 Market Share (%)	3Q09 Shipments	3Q09 Market Share (%)	3Q09-3Q10 Growth (%)
HP	4,459,473	25.3	4,372,231	25.4	2.0
Dell	4,188,688	23.8	4,447,478	25.8	-5.8
Acer	1,848,511	10.5	2,338,816	13.6	-21.0
Apple	1,831,664	10.4	1,611,000	9.3	13.7
Toshiba	1,629,100	9.3	1,427,000	8.3	14.2
Others	3,650,807	20.7	3,036,573	17.6	20.2
Total	17,608,242	100.0	17,233,099	100.0	2.2

Note: Data includes desk-based PCs and mobile PCs.
Source: Gartner (October 2010)

Table 3
Preliminary EMEA PC Vendor Unit Shipment Estimates for 3Q10 (Thousands of Units)

Company	3Q10 Shipments	3Q10 Market Share (%)	3Q09 Shipments	3Q09 Market Share (%)	3Q09-3Q10 Growth (%)
Acer	6,147	22.5	6,161	24.2	-0.2
HP	5,206	19.1	4,949	19.5	5.2
Dell	2,449	9.0	2,201	8.7	11.3
Asus	2,370	8.7	1,875	7.4	26.4
Lenovo	1,613	5.9	1,000	3.9	61.3
Others	9,498	34.8	9,235	36.3	2.8
Total	27,284	100.0	25,420	100.0	7.3

Note: Data includes desk-based PCs and mobile PCs.
Source: Gartner (October 2010)

Meanwhile, Citigroup on Monday forecasted that 35 million tablet computers will be sold in 2011, while FBR Capital Markets said it expects 70 million tablets to be sold next year, with 40 million of that figure coming from Apple. FBR estimates that every 2.5 tablets sold negates the sale of 1 PC.

It’s not just the growth of tablets threatening PC unit sales. Gartner said five other dynamics that are challenging the PC industry include:

• Emerging markets will drive growth while mature markets will face mounting challenges. Emerging markets will account for more than 50 percent of total PC shipments by the end of 2011 with many of those consumers potentially leap frogging directly to alternative devices.
• Consumers are postponing purchases in the face of economic uncertainty. That’s led to a steep downgrade in shipments in mature markets.
• Emerging devices like tablets are growing more PC-like, making it easier for consumers to choose them over PCs, especially mini-notebooks. They’re especially popular with people who want more dedicated entertainment and instant-on features.
• The life cycle of PCs are being lengthened as consumers supplement their computing needs with emerging devices.
• The growth of virtual desktops, while not expected to be a major factor until 2012, will also lesson the need for new PC units as consumers run them on refurbished PCs and thin client machines.

PCs aren’t going to go away any time soon, but they are increasingly challenged. While they have a clear upper hand in content creation and more intensive computing, tablets are showing that they serve a need and can lessen the computing workload of a traditional PC. With Android tablets expected to jump into gear next year, the challenge is for PC makers to find ways to keep their traditional computers attractive. Apple has done it with the Macbook Air. Now, it’s up to others to push the edge or risk losing even more units sales to tablets.

The above chart does not include the Samsung Galaxy Tab, Barnes & Noble's ColorBook.  RIM BlackBerry, Acer, Microsoft, Motorola, Fujitsu, Sony, Archos, Lenovo, Google and ViewSonic have announced plans to introduce their own tablet computers either in time for Christmas or early 2011.  You can bet that there will be no shortage of tablet PC's in the coming months. 

COMMENTARY:   If you want to just surf the Net, listen to music, read digitized books and magazines and watch movies, the iPad is your cup of tea, but for real productivity in the corporate world and enterprise environment, you will need a desktop or laptop with a keyboard and large screen.  Maybe, it's just my built-in bias concerning tablets, but I find them cumbersome to use and limited in what they can do.  There, I mouthed off, now shoot me.

Courtesy of an article dated November 29, 2010 appearing in Gigaom

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