Does the growing popularity of tablet computer mean end of the ubiquitous desktop PC? At least that is what major global research firms foresee ‘happening soon.’
“Demand for tablets is continuing to hit sales of full-fat PCs.”
- Gartner
As the euphoria over Apple’s iPad India launch begins to build up, a big question mark pops up over the fate of the desktops or personal computers (or simply PCs). And it is coming from no ordinary quarter but the most respected IT market intelligence firm, Gartner, which predicts tablet devices like iPad and Samsung’s Galaxy Tab to grow by 181% to 54.8 million in 2011, and then to jump more than tenfold to 208 million in 2014. According to Wikipedia, a tablet computer, or simply tablet, is a complete personal mobile computer, larger than a mobile phone or personal digital assistant integrated into a flat touch screen and primarily using stylus, digital pen or fingertip input along with an onscreen virtual keyboard rather than a physical keyboard.
So, is the end of desktops coming soon? At least a deluge of recent shipment figures suggest so. For instance, the PC sales in the US, according to Gartner, fell by 6.6% (for all the manufacturers) during the fourth quarter of the calendar year 2010. IDC too said that the US PC shipments fell by 4.8% in Q4 2010. Regarding the worldwide PC sales, during the same quarter, Gartner said that it was ‘weak’ with growth of just 3.1% as against 4.8% it had originally forecast. The research firm attributed this to the rising competition from other consumer electronic devices such as tablets and games consoles. “The PC market will face challenges with more intensified competition among consumer spending,” said Gartner’s Principal Analyst, Mikako Kitagawa, in a statement. The research firm pegged the growth in global shipments of PCs at 13.8% to 351 million units in 2010.
According to IDC, worldwide PC shipments jumped nearly 14 percent in 2010 over last year, despite a relatively meager performance in the fourth quarter, a soft consumer market and vigorous sales of media tablets. “In addition to relatively high market penetration and a 'good-enough' computing experience with existing PCs, consumers are being more cautious with their purchases and competing devices have been vying for consumer dollars,” said David Daoud, IDC’s Research Director. “This situation is likely to persist in 2011, if not worsen, as a wave of Media Tablets could put a dent in the traditional PC market," he warned.
However, Canalys, another IT research firm, begs to differ from its peers on the issue of whether tablet devices should be defined differently from PCs or not. In a release dated January 26, 2011, the Palo Alto-based firm said that worldwide total PC shipments grew at a healthy 19% in Q4 2010. Canalys, unlike its peers, incorporates pad shipments, such as the Samsung Galaxy Tab and Apple’s iPad, in its total PC market report. “Any argument that a pad is not a PC is simply out of sync,” said Daryl Chiam, Senior Analyst at Canalys. “With screen sizes of seven inches or above, ample processing power, and a growing number of applications, pads offer a computing experience comparable to netbooks. They compete for the same customers and will happily coexist. As with smart phones, some users will require a physical keyboard, while others will do without,” he added further.
Pads to cannibalize other consumer electronic devices too
While not everyone would agree with that view, one point which everyone agrees on is that pads are the future. In the recently concluded quarter, Apple climbed to third place in the market, ‘thanks to impressive iPad and Mac sales, as well as fast growth in Asia Pacific,’ said Canalys. The firm attributes the majority of Q4 market growth to the rising demand for media tablets, a new product category. “Pads gave consumers increased product choice over the holiday season,” said Canalys Analyst Tim Coulling. “While they do not appeal to first-time buyers or low-income households, they are proving extremely popular as additional computing devices,” he said further. Since its commercial launch in April 2010, Apple is estimated to have shipped about 10 million iPads; the company sold 4.19 million units of its hugely popular pad during the Q4 2010, compared to 3.27 million units it shipped in the preceding quarter. And this has driven competitors crazy with every gizmo maker worth its salt scrambling to hit the market with its version of a pad (read: tablet). From Acer to Dell, Samsung to HP, they all have been slogging hard to give a tough fight to iPad.
Industry analysts also warn that pads would also be a major threat to other standalone consumer electronic devices such as e-readers and gaming consoles. “The all-in-one nature of media tablets will result in the cannibalization of other consumer electronics devices such as e-readers, gaming devices and media players,” said Carolina Milanesi, Research Vice President of Gartner’s Mobile Devices team, in a statement. “Mini notebooks will suffer from the strongest cannibalization threat as media tablet average selling prices drop below $300 over the next two years,” she added.
iSupply, another leading research firm, however, is comparatively more vocal in its support for pads. “We believe creation tablets will create both a larger market opportunity and more PC cannibalization than others forecast today,” writes William Kidd, iSupply’s Director & Principal Analyst, in a report titled, “Tablets: Epicenter for the Convergence of Smart Phones and PCs.” He further added, “Our departure from conventional thinking stems from our belief that tablets (2-4 years out) not only will be able to retain their form factor advantages, but also possess notebook content creation capabilities when equipped with a competent O/S and a wireless keyboard/mouse.”
Desktops to stay, despite pads’ onslaught
Most analysts believe that desktops would survive despite the rising onslaught from tablet computers. At least for now. “Tablets will be relevant as a second device, not as the first PC,” said S Rajendran, Chief Marketing Officer of Acer, India, where it is the market leader in the light-notebook segment, in an interview to DNA newspaper. Further, another drawback is, the world's most popular operating system -Windows- is yet to be adapted to run on tablets, the news daily quoted him saying.
But others like Dell’s Amit Midha, Chairman for South Asia and Greater China, believe that the market for media tablets would only soar from here on, and they are busy devising strategies to ensure that happens, sooner, by emphasizing on the ‘acceptability’ factor. “We are looking at various media service providers to launch an India-specific tablet solution,” the news paper quoted Midha as saying. Towards this, Dell which makes Streak brand of tablet computer is trying to tie-up with content providers like newspaper and content publishers, music and multi-media copyright owners etc.
India’s tablet PC market is estimated at 25,000 units a quarter, but holds the promise of growing quickly as 3G penetration gathers momentum, the business daily said. India and China are the two fastest growing markets in the world where demands for such potable devices are only going to grow further and hence how the consumers (especially the youth which is a major buyer segment) respond to these offerings would be crucial.
Amy
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