Tablet boom prompts Gartner to cut PC market view

HELSINKI Thu Sep 8, 2011 4:43am EDT

People test out Samsung Electronics' new tablet 'Galaxy Tab 10.1' during its launch ceremony at the company's headquarters in Seoul July 20, 2011. REUTERS/Jo Yong-Hak

People test out Samsung Electronics' new tablet 'Galaxy Tab 10.1' during its launch ceremony at the company's headquarters in Seoul July 20, 2011.

Credit: Reuters/Jo Yong-Hak

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HELSINKI (Reuters) - Research firm Gartner slashed its growth forecast for the global PC market this year to 3.8 percent from 9.3 percent, citing slower economies in Western Europe and the United States, and a boom in media tablets.

The success of Apple's iPad has dented consumer demand for personal computers, while the long-hoped for recovery in the corporate and government PC replacement cycle has been derailed by the U.S. and European debt crises and associated fallout.

"An increasingly pessimistic economic outlook is causing consumer and business sentiment to deteriorate in both regions," Ranjit Atwal, research director at Gartner, said in a statement on Thursday.

Gartner said it expects consumer spending to tighten in response, while business spending would also tighten but to a lesser degree.

"U.S. consumer PC shipments were much weaker than expected in the second quarter, and indications are that back-to-school PC sales are disappointing," Atwal said.

The slowing, changing market has hit traditional leaders of the PC market.

Hewlett-Packard stunned markets in August when saying it may shed its PC business -- the world's largest after the $25 billion acquisition of Compaq in 2002 -- as part of a wrenching series of moves away from the consumer market.

Those included killing off the TouchPad tablet computer in the face of stiff competition from Apple.

"Media tablets have changed the dynamic of the PC market and HP's decision to rethink its PC strategy simply highlights the pressure that PC vendors are under to adapt or abandon the market," said George Shiffler, research director at Gartner.

No. 2 PC vendor Acer Inc last month reported the first quarterly loss in its history, as it took charges to reorganize in a troubled first half, and said it would be impossible to break even for the full year.

"Vendors' tried and true business models are failing as traditional PC functionality is extended to other devices, and users continue to lengthen PC lifetimes. Vendors only seem to be failing as they look for quick fixes," Shiffler said.

(Editing by David Hulmes)

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Comments (2)
whuppsadaisy wrote:
In our world of miniaturization, the PC was destined to be replaced by something smaller,faster,cheeper, and more portable. Instant information on the hoof, allows use to communicate,anything to anyone,from anywhere,anytime. But computer screens can only get so small before they can no longer display an entire page and still be read. So if they need to get rid of those PC’s that still have, they can give them away for free with the purchase of a new tablet.Plus shipping and handling of course.

Sep 08, 2011 11:09am EDT  --  Report as abuse
Ananke wrote:
An app costs $1-2, versus a PC application that costs from $49 for a game to hundreds for a useful software. Hence, customers get Apple – it is shiny, fancy, durable and just works. The software ecosystem is reach and a la carte cheap.
The only alternative is Android – it allows freedom of being locked to a single app market, connect-ability without the necessity of a sync software.
So, unless you are in the 1% of tech savvy people, a PC is an expensive and underutilized equipment. The software price is the problem, not the hardware.

Sep 08, 2011 12:40pm EDT  --  Report as abuse
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