New iPad Launch Could Eat Into PC Sales

Max ‘Beast from the East’ Smolaks covers open source, public sector, startups and technology of the future at TechWeekEurope.

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Analysts predict that the tablet market could receive a further boost when the next iPad is launched

Ahead of the expected launch of the next iteration of the iPad, many observers, including Apple chief executive Tim Cook, are predicting that tablet sales will soon surpass PC sales. One analyst, Horace Dediu, even predicts it will happen as early as 2013.

The new iPad is expected to boost the growing tablet market at a time when PC shipments are decreasing, fuelling speculation that mobile devices could overtake traditional computers.

Hungry Tablets

PC shipments in Western Europe amounted to 16.3 million units in the fourth quarter of 2011, a 16 percent decline from last year. The figure was even lower in the UK, where 2.9 million units were sold, a decline of 19.6 percent when compared with the equivalent period in 2010, according to Gartner.

Worldwide, vendors shipped 487.7 million smartphones during the entire last year, compared to just 414.6 million PCs, of which 63.2 million were tablets, according to research by Canalys.

The New York Times reports that Apple sold around 15 million iPads in the third quarter of 2011, more than twice the number it sold a year earlier, while the Amazon Kindle Fire sold nearly four million units in the same period after late release on 15 November.

Kindle has been the only  serious competitor – albeit at a far lower price point – to the iPad, taking Android tablets to a 39 percent market share by units sold. Before the Kindle fire, Android tablets had a market share of around 29 percent, led by the Samsung Galaxy Tab.

Tablet sales should receive an additional boost when the new iPad, which is expected to have a higher resolution screen and more powerful processor, launches this Wednesday. A recent study from InMobi, a US mobile ad network, showed that 65 percent of respondents who intend to buy an iPad 3 would consider buying an iPad or iPad 2 at a reduced price instead. This means that after tomorrow’s launch, even sales of the older models of the tablet could shoot up, increasing overall tablet penetration further.

Windows 8, the operating system from Microsoft designed with touchscreens in mind, will arrive later this year, possibly attracting  customers who aren’t interested in the Apple tablet. Since both tablets and PCs can run the same Windows 8 software, it will blur the line between the devices even further and make the transition to a new platform easier.

There is also an alternative view on the subject that states tablets are not a threat to PCs, and the decline in sales is caused by other factors. A report by research firm NPD Group found that 75 percent of consumers who purchased an iPad said they had no intention of buying anything else, making those purchases incremental to the consumer technology industry. In other words, tablets are not “cannibalizing” PC market simply because tablet buyers wouldn’t buy a PC anyway.

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