PC Sales Start Slow in 2011 as Tablets ‘Usurp’ Market

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Estimated growth of PC sales in 2011 were cut in half while demand for tablets increase, prompting one Wall Street analyst to tell investors Tuesday Apple’s iPad has ‘usurped’ a portion of PC sales.

Deutsche Bank analyst Chris Whitmore trimmed his PC sales forecast to 4 percent growth, down from the 9 percent growth previously expected. Meanwhile, he expects 2011 tablet sales to increase to 45 million units, up from his previously expected 40 million. The analyst believes Apple will sell 35 million of the 45 million tablets.


“In aggregate, we believe iPad will remain dominant with 70 percent market share,” he writes. Whitmore’s tablet estimates are below other experts “due to our concerns that non-iPad tablets will underwhelm.”

What can rival tablet-makers do to compete? Two options exist, the Deutsche Bank expert explains: either set a price lower than the iPad (thus cutting into profits) or provide consumers a better user experience. The analyst is skeptical either tactic will help the likes of HP, Motorola or RIM.

As for the ailing PC (non-tablet) sales, the picture doesn’t improve for 2012. The iPad is seen as a PC replacement by around 30 percent of consumers, according to the analyst. “Apple remains the primary beneficiary of this technology transition which is increasingly coming at the expense of PC vendors (Acer, HPQ, etc.),” Whitmore writes.

In 2012, more tablets and fewer PCs are expected to sell. The analyst predicts 70 million tablets will be sold, up from his previously-projected 60 million units. PC sales will shrink to 7 percent annual growth, down from his earlier projected 8 percent.

As an indication of the rising fortunes of tablets eclipsing PC demand, Deutsche Bank hiked its Apple price target to $450 per share and cut its price target for Dell to $18 and HP to $40.

[AppleInsider]