Surging Consumer Interest in Tablets Causes PC Sales to Decline in Q1

By Ashok Bindra May 24, 2011

According to a new study by market watcher IHS iSuppli, the rising consumer interest in media tablets like Apple’s iPads is beginning to take a toll on the global PC market. As a result, the shipments of desktops and notebooks in the first quarter of 2011 declined compared to the same period in 2010. The research firm’s data shows that worldwide PC shipments amounted to 81.3 million units in the first quarter of 2011, down 0.3 percent from 81.6 million during the first quarter of 2010.

Consequently, three out of the world’s top five PC makers suffered year-over-year declines in shipments during the first quarter. Number three-ranked PC maker Acer, which sells a high proportion of netbooks that face direct threat from tablets, bore the brunt of the downturn. IHS data shows that Acer’s first-quarter shipments plunged by 20.4 percent to 9.2 million units, down from 11.6 million during the same period in 2010.

“The increasing momentum of the media tablet market, led by the iPad, is creating a difficult environment for the PC industry,” said Matthew Wilkins, principal analyst for compute platforms research at HIS, in a statement. “All the attention surrounding tablets contributed to weak consumer demand for PCs in the first quarter.”

Although corporate PC demand was strong, it wasn’t enough to offset the decline in consumer sales, said IHS. Further commenting on this trend, Wilkins said, “IHS believes that the jury is still out on exactly how much tablets are cannibalizing PC sales.”

“However, the rising number of tablet models on the market, along with certain high-profile product launches during the first quarter, caused confusion among consumers as to exactly how to view the tablet platform relative to the PC platform. This contributed to the PC sales decline in the first quarter,” continued Wilkins.

The first-quarter decline came as somewhat of a surprise, given that the fourth quarter represented the best period ever for global PC sales as PC shipments hit a new quarterly record, blowing past the previous high of 88.9 million units set in the fourth quarter of 2009. Corporate demand had been driving growth of the market, according to the research firm.

Nevertheless, despite the first-quarter weakness, PC sales growth should return later in the year, predicts IHS. The current IHS iSuppli forecast predicts that the global PC market in 2011 will expand by 8 percent to 373 million units, up from 345 million in 2010. This compares to 14 percent growth in 2010.

Although, Hewlett-Packard Co. continued its reign as the number one PC vendor in the first quarter, with a market share of 18.9 percent, the company suffered a 2.1 percent decline in sales compared to the same time a year ago. Dell continued to hold on to No. 2 position over third-ranked Acer in the first quarter, with a market share of 12.9 percent.

Lenovo and Toshiba were in the top five rankings.

Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.

Edited by Carrie Schmelkin

TechZone360 Contributor

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