Gartner lowers worldwide PC forecast due to iPad effect

Cyber Monday Worldwide PC shipments are on pace to total 352.4 million units in 2010, a 14.3 percent increase from 2009, according to the latest preliminary forecast by Gartner, Inc. These projections are down from Gartner’s previous PC shipment forecast in September of 17.9 percent growth.

2011 worldwide PC shipments are forecast to reach 409 million units, a 15.9 percent increase from 2010. This is down from Gartner’s earlier estimate of 18.1 percent growth for 2011.

“These results reflect marked reductions in expected near-term unit growth based on expectations of weaker consumer demand, due in no small part to growing user interest in media tablets such as the iPad,” said Ranjit Atwal, research director at Gartner, in the press release. “Over the longer term, media tablets are expected to displace around 10 percent of PC units by 2014.”

While Gartner does not regard the current dynamics in the PC market quite yet as an inflexion point, analysts do see many disruptive forces coming together that will weaken the market moving forward.

“PC market growth will be impacted by devices that enable better on-the-go content consumption such as media tablets and next-generation smartphones,” said Raphael Vasquez, research analyst at Gartner, in the press release. “These devices will be increasing embraced as complements if not substitutes for PCs where voice and light data consumption are desired. It is likely that desk-based PCs will be adversely impacted over the long-term by the adoption of hosted virtual desktops, which can readily use other devices like thin clients.”

“PCs are still seen as necessities, but the PC industry’s inability to significantly innovate and its overreliance on a business model predicated on driving volume through price declines are finally impacting the industry’s ability to induce new replacement cycles,” said George Shiffler, research director at Gartner, in the press release. “As the PC market slows, vendors that differentiate themselves through services and technology innovation rather than unit volume and price will dictate the future. Even then, leading vendors will be challenged to keep PCs from losing the device ‘limelight’ to more innovative products that offer better dedicated compute capabilities.”

In the near term, many consumers and businesses will continue to refrain from buying PCs, as they collectively rebuild their finances in the face of slower income growth, weaker employment gains and a cloudy economic outlook. Over the longer-term, users are likely to slow PC replacements and extend PC lifetimes as they turn to other devices as their primary computing platform.

Gartner analysts said there are five dynamics that are challenging the PC industry:

Emerging Markets Continue to Drive Growth
While we expect a continued upside in our emerging market forecast, leading to emerging markets gaining more than 50 percent of the total worldwide PC market by the end of 2011, mature markets will face mounting challenges. Furthermore, in emerging markets, there is good chance that consumers will simply leap frog PCs and move directly to alternative devices in the coming years rather than following the traditional pattern of purchasing a PC as their first computing device.

Consumer Wallet Continues to Shrink
Home mobile PCs have suffered the steepest downgrade with shipments in mature markets expected to be significantly weaker. Consumers in the U.S. and Western Europe continue to postpone purchases in the face of financial and economic uncertainty. However, Gartner said that the bigger issue for PCs in the home market is consumers temporarily, if not permanently, forgoing PC purchases in favor of media tablets.

Challenge of Emerging Devices
Media tablet capabilities are expected to become more PC-like in the coming years, luring consumers away from PCs and displacing a significant volume of PC shipments, especially mini-notebooks. Media tablets are rapidly finding favor with PC buyers who are attracted to their more-dedicated entertainment-driven features and their instant-on capability.

Extended Life Cycle Impact
The ascent of emerging devices will have an important indirect impact on PCs – the extension of average PC lifecycles. The effect of this ascent will be to spread traditional PC functionality over a variety of complementary devices. As this happens, analysts foresee users extending the lifetimes of PCs because there will be less need to replace them as often.

Uptake of Thin Clients
Hosted virtual desktops (HVDs) are not expected to earnestly impact mature professional markets until 2012, at the earliest. Longer term, users that adopt HVDs to access their compute capabilities will do so predominantly by using refurbished PCs and thin clients. These alternative devices will displace new PC units, thereby reducing expected future desk-based shipment growth.

More information is available in the report “Forecast Alert: Worldwide PC Forecast Downgraded as PC Market Hit by Disruptive Forces”, which can be found on Gartner’s website here.

MacDailyNews Take: Bloodbath.

Source: Gartner, Inc.

18 Comments

  1. They can’t see it. “Over the longer term, media tablets are expected to displace around 10 percent of PC units by 2014.” Gartner and the rest can’t see the evolution of the PC (personal computer) into the iPad (which Star Trek call a PADD 23 years ago).

    The iPad can:
    • read digital files
    • create digital devices
    • connect to a keyboard
    • print to a printer

    Exactly what did a Apple II computer or Windows PC do that the iPad can’t. There is an app for that. The real way to see this is what couldn’t a computer from 20 years ago do that an iPad can? They were called computers. Get over it. The iPad is a computer. Suck it up PC box makers, you missed the move to the tablet computer!

  2. Sorry, I ment to write:

    • create digital files (not devices)

    Maybe Steve Jobs has the research and development group working on that. When Apple work out AI watch out Skynet!

  3. “As the PC market slows, vendors that differentiate themselves through services and technology innovation rather than unit volume and price will dictate the future.”

    Go Apple!

  4. Hi ceres,

    We are now deep in the switch back to Apple. Try checking out a local university. You will see 3 Macs for every 1 PC. The decade of students that played Windows PC games has ended. This tsunami of new employees and new consumers have already made up their minds and it has an Apple logo on the choice!

  5. Heads up for those who don’t know: Gartner is not an impartial observer. They get the bulk of their income from the IT establishment.

    They will not bite the hand that feeds them by calling iPads mobile computers. They pretend to be objective; they certainly are not.

    Also, expect them to keep pushing the meme that iPad is for consumption only.

    In short, Gartner is a douchebag organization.

  6. The differences in the growth percentages forecast by Gartner amount to a decline in PC shipments of 11.1 million in 2010 and 7.2 million in 2011. That could very well be due largely to the impact of the iPad, although companies like Gartner will always find a reason to justify the variances from their forecasts.

  7. I agree that the tide is turning. I was in the Lenox Mall Apple Store in Atlanta a couple of weeks ago. Macbook Airs and iPads were flying out of the packed store (on a weekday no less) – including the MB Air I took home:)

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