Outlook for PCs Strong, Despite Pressure from Tablets

Is Apple playing a role in cannibalization? Bill Hope, an analyst at Goldman Sachs thinks this may be the case. According to a Digital Trends report, the company’s shift to Verizon could easily cannibalize business with AT&T. At the same time, the iPad will consume 19 million laptop and netbook sales. The good news for the laptop market, however, is that even with the tablet threat; the market is still expected to enjoy high growth for the next several years. 

According to Shope, tablet shipments will jump to 54.7 million in 2001, eating up roughly 35 percent of PC sales. This number is expected to grow to 79.2 million in 2012, eating up 33 percent of PC sales. Over the course of 2011, 19.1 million laptop sales will evaporate as a result of tablets, with 26.1 disappearing in 2012.Even with tablets eating into PC sales, all is not doomsday for the PC. In fact, this segment of the market is expected to continue to enjoy strong growth and a strong market presence. In 2012, PCs should sell in the 380-400 million unit range.

Shope was quick to point out that it is difficult to accurately predict the cannibalization rate of such a nascent market, but he believes early evidence in the industry supports his views. Goldman Sachs’ recent IT spending survey published in November 2010 showed that 51 percent of respondents expect some degree of notebook cannibalization from tablets.

The results of this survey are important in that it is a corporate survey and tablets will likely play a more significant role in the consumer market; and netbooks represent an insignificant component of corporate PC purchases. The firm expects that December quarter retail data will provide even more interesting tablet cannibalization data points. 

Earlier this week, TMCnet reported on falling PC prices, asking whether or not the days of the bargain PC are over. A recent Wall Street Journal report shows that consumers are paying more for computers than they have in years. The retail price of a PC sold in November in the U.S. averaged $615, up 6 percent from last year’s $580. According to NPD Group (News - Alert) research, averages prices have increased in six of the past eight months compared with levels in 2009.