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April 14, 2011

PC Sales Down, Thanks to Tablets

By Michelle Amodio, TMCnet Contributor

A weak demand for PCs coupled with the fact that users are switching to more mobile devices such as tablets has spelled doom for the PC market’s first quarter.

Two research groups, Gartner (News - Alert) and IDC, both have stated that the percentages in the PC market are down compared to this time last year.




According to the research group Gartner, PC shipments were just 84.3m units in the first quarter of 2011 – a 1.1 percent year-on-year decline (from 85.1m units) which was especially marked in the US, where it fell by 6.1 percent. IDC (News - Alert), however, said that global shipments were 80.56m, a year-on-year fall of 3.2 percent from 83.2m in the first quarter of 2010, and down more than 10 percent in the US.

No matter the numbers, both are indicative of a decline.

"Weak demand for consumer PCs was the biggest inhibitor of growth," said Mikako Kitagawa, principal analyst at Gartner in a press release. "Low prices for consumer PCs, which had long stimulated growth, no longer attracted buyers. Instead, consumers turned their attention to media tablets and other consumer electronics. 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."

Of the top five manufacturers, Acer had the most problems, with sales dropping 42.1 percent. Dell’s (News - Alert) sales dropped 11.8 percent and HP’s fell 2.4 percent. Collective sales from other PC vendors were down 14.6 percent.

All of which is bad news for Microsoft (News - Alert), which makes the bulk of its money from selling new Windows licenses.

According to IDC, despite promising economic sentiments, mature regions appear to be more focused on necessary replacements versus buying secondary PCs. Emerging markets fared better due to lower saturation rates.

"Long-term success will depend on hardware manufacturers being able to articulate a message that is beyond simple hardware specifications. '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,” said Jay Chou, senior analyst at IDC.


Michelle Amodio is a TMCnet contributor. She has helped promote companies and groups in all industries, from technology to banking to professional roller derby. She holds a bachelor's degree in Writing from Endicott College and currently works in marketing, journalism, and public relations as a freelancer.

Edited by Rich Steeves







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