Lust for media tablets kills demand for mobile PCs

3 Mar 2011

Waning demand for mobile PCs due to greater consumer enthusiasm for the multitude of mobile internet devices has caused major analyst Gartner to reduce its projected growth for the PC industry this year from 15.9pc to 10.5pc.

Gartner is lowering its PC unit forecast for 2011 and 2012, based on expectations of weaker demand for mobile consumer PCs. This demand is set to be all the weaker due to the imminent arrival of the iPad 2, not to mention HP’s webOS-based TouchPad, RIM’s PlayBook and Android-based competitors, like the Motorola Xoom and HTC Flyer.

Worldwide PC shipments are forecast to reach 387.8m units in 2011, a 10.5pc increase from 2010, according to Gartner’s preliminary forecast. This is down from Gartner’s previous projection of 15.9pc growth this year. Gartner expects worldwide PC shipments to total 440.6m units in 2012, a 13.6pc increase from 2011. This is down from Gartner’s previous outlook of 14.8pc growth for 2012.

MIDs killed the mobile PC star

“These results reflect marked reductions in expected near-term unit growth based on expectations of weaker consumer mobile PC demand, in no small part because of the near-term weakness expected in China’s mobile PC market, but also because of a general loss in consumer enthusiasm for mobile PCs,” said Ranjit Atwal, research director at Gartner.

Gartner analysts said consumer mobile PCs have been the dynamic growth engine of the PC market over the past five years, averaging annual rates of growth approaching 40pc. For much of this period, mobile PCs remained consumers’ platform of choice for bringing the internet into their daily lives.

However, due to the spread of low-cost embedded Wi-Fi modules, internet access is now available through a multitude of mobile devices that allow consumers to engage in virtually all their favourite online activities without the need of a mobile PC.

“We expect growing consumer enthusiasm for mobile PC alternatives, such as the iPad and other media tablets, to dramatically slow home mobile PC sales, especially in mature markets,” said George Shiffler, research director at Gartner.

“We once thought that mobile PC growth would continue to be sustained by consumers buying second and third mobile PCs as personal devices.

“However, we now believe that consumers are not only likely to forgo additional mobile PC buys but are also likely to extend the lifetimes of the mobile PCs they retain as they adopt media tablets and other mobile PC alternatives as their primary mobile device.

“Overall, we now expect home mobile PCs to average less than 10pc annual growth in mature markets from 2011 through 2015.”

Professional PC market to continue strong growth

The professional market is expected to continue to exhibit double-digit growth in 2011 and 2012, as ageing PCs are replaced across all regions of the world.

“However, even in the professional market, media tablets are being considered as PC substitutes, likely at least delaying some PC replacements,” said Raphael Vasquez, senior research analyst at Gartner.

The dramatic rise in the popularity of alternative devices and the limitations of the PC are two of many dynamics that played a significant role in Gartner’s revised outlook for the PC industry.

Consumer enthusiasm for media tablets is a key factor in Gartner’s forecast that the consumer mobile PC market will remain weak in mature markets.

Consumer substitution of media tablets for mobile PCs already appears to be impacting mobile PC shipments in mature markets. However, a bigger issue seems to be that consumers are taking a “wait and see” attitude toward PCs as they anticipate the arrival of new media tablets during the rest of 2011.

Not too long ago, PCs were a “fashion accessory” in mature markets with vendors linking themselves to fashion designers and even creating PCs specifically for women.

The current “cool” device is the smartphone, and now PCs will soon have to do battle with media tablets when they are launched in large numbers in the second quarter of 2011. Up to now, the appeal of mobile PCs has been their portability.

But mainstream mobile PCs have not shed sufficient weight, and do not offer the all-day battery life, to substantiate their promise of real mobility. These limitations have become all the more apparent with the rapid spread of social networking, which thrives on constant and immediate connections.

In short, all-day untethered computing has yet to materialise, and that has exposed the ‘mobile’ PC as merely a transportable PC at best, Gartner says.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years