iPad damages PC sales

19 May 2011

NEW YORK: The success of tablet devices such as Apple's iPad has contributed to the recent downturn in PC sales.

According to latest figures from research firm IDC, global shipments of PCs dropped 3.2% in the last quarter to April 2011, despite increasing fixed-line web penetration around the world.

At Hewlett Packard (HP), consumer PC sales were down 23%, while Dell suffered a 7.5% decrease - though these losses were offset by the fact that the bulk of PC sales go to business clients.

Leo Apotheker, Dell's new ceo, described the market as "bifurcated", with companies rather than consumers spending big on the company's products.

Partly as a response to the success of the iPad, which scored sales of 4.69 million in the last quarter, Hewlett Packard plan to bring their own tablet to market.

The TouchPad will be launched this summer and will run the WebOS operating system, which was acquired as part of HP's 2010 takeover of Palm Inc.

Other competitors, such as Research in Motion, Motorola Mobility Holdings Inc and Samsung have also entered the fray by launching tablets.

Jeffries & Co predict that more than 70 million tablets will be sold in 2011. Over the next three years, they expect annual tablet sales to reach 246 million.

The popularity of free and paid-for apps for magazines, movies and downloadable games has been a major factor in boosting tablet sales at the expense of the traditional PC market.

Jane Snorek, senior research analyst at Nuveen Asset Management, suggested that this trend would continue.

"The tablet is going to replace at least the home computer," she said.

Data sourced from Bloomberg/New York Times; additional content by Warc staff