April 14, 2011

Tablets Taking Sales From Desktop Computers

Desktop PC sales are cooling and one of the reasons may well be the increased popularity of tablet devices such as Motorola's Xoom and Apple's iPad, according to various media reports. Tablets bridge the divide of smartphone technology which emphasizes entertainment and location services, while the strong point of traditional PC machines are their processing ability and wealth of productivity software.

Apple Inc.'s iPad, which made its public debut last summer, has been a great critical and sales success. Analysts expect iPad sales to be near 15 million for last quarter alone.

Gartner Inc. claims its research shows desktop PC sales slowed by 1.1 percent compared to the same period last year, to 84.3 million. International Data Corporation (IDC) said its numbers show PC shipments fell 3.2 percent to 80.6 million. The companies measure the market in different ways but a trend is clear.

The world's largest PC makers, Hewlett-Packard, Acer and Dell all saw year-on-year declines, Reuters reports. The slowdown also has chipmaker Intel and software giant Microsoft concerned as any world-wide dip in sales will affect them deeply.

Fuel and commodity price increases, along with production disruptions caused by the natural disasters in Japan last month, may also have curbed sales, Bloomberg reported.

Gartner principal analyst Mikako Kitagawa tells the Guardian, "With the launch of the iPad 2 in February, more consumers either switched to buying an alternative device, or simply held back from buying PCs. We're investigating whether this trend is likely to have a long-term effect on the PC market."

For years, companies tried to popularize tablets but they were most often the size of a laptop screen and running a version of desktop operating system which became slow and prone to bugginess.

It wasn't until Apple released the iPad last April that the category took off with Apple shrinking the hardware to fit comfortably in a person's hand and targeting it primarily as an entertainment device that easily streams video, plays games in an eye-pleasing size and surfs the web quickly.

Other tech heavyweights including Hewlett-Packard, Dell and BlackBerry maker Research In Motion, are attempting to play catch up and expected to release viable models of their own soon. While these companies struggle to release their first models, Apple is already selling its second generation iPad with a third version reportedly in development already.

IDC explains the slowing of PC sales to several factors. Businesses are hesitant to commit to upgrading desktop hardware in the current economic situation and consumers are finding more of their needs can be met with mobile devices and are not tied to a home desk to do their personal computing.

IDC senior research analyst Jay Chou explains that we may have reached a practical limit to the computing power needed for daily tasks and home use. "'Good-enough computing' has become a firm reality, exemplified first by Mini Notebooks and now Media Tablets."

"Macroeconomic forces can explain some of the ebb and flow of the PC business, but the real question PC vendors have to think hard about is how to enable a compelling user experience that can justify spending on the added horsepower," he said.


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