Does Apple's iPad success mean doom for PC makers?
HP and Dell suffer low sales to due tablets
Last year, nearly 18 million tablets were shipped, with Apple's iPad accounting for nearly 83% of the market. On the other hand, more than 346 million personal computers were shipped in 2010, with Hewlett Packard grabbing 18.5% of the market, and Dell, Inc. having 12.3%.
Research firm International Data Corporation said last month it expects that there will be 50 million tablet shipments in 2011, with Apple maintaining 70% to 80% of the tablet market. Jefferies & Co., however, raised the estimates yesterday, projecting that 70 million tablets will be sold this year, with the total expected to increase to 246 million in three years.
Cupertino, California-based Apple sold 4.69 million iPads in the first quarter of 2010, for a total of about 20 million since the April 2010 debut. With a 9.7-inch touch screen, a Wi-Fi data connection to download popular games like Angry Birds, movies, and thousands of other apps, the iPad has outsold all the other tablets combined.
Various analysts and studies have previously predicted that the iPad would not cannibalize into notebook and PC sales. However, recent results for the PC giants HP and Dell appear to show otherwise.
Hewlett-Packard said its PC sales decreased 23 percent last quarter due to a "continued softness in consumer PCs across all geographies." Revenue from PC sales were down to $695 million in the three months ended April 30, 2011, compared with $808 million in the previous quarter and $717 million in the quarter ended April 30, 2010. HP also cut $1 billion off its annual sales forecast, citing that the revised outlook reflects an expected near-term impact from the Japan earthquake and related events and continued softness in sales of consumer PCs.
Dell Inc., HP's main rival, said sales to consumers slumped 7.5 percent. It acknowledged that sales to consumers fell partly due to competition with the iPad and other tablets.
The record sales of the iPads have affected other firms that rely on PC sales. Microsoft Windows, the lead operating system for PCs but is not used in iPads, had its sales fall 4.4 percent to $4.45 billion. At Intel, whose processors run more than 80 percent of the world's PCs, had to rely on emerging markets and corporate sales to boost growth in the PC-chip division.
Non-Apple to go into tablets
In order to avoid getting left behind, other companies are investing in the tablets market.
Apple is expected to face more competition this year from Research in Motion's PlayBook, Samsung Electronics Inc.'s Galaxy Tab and Motorola Mobility Holdings Inc.'s Xoom, though these devices still have to gain traction. Apple released its iPad 2, which is 33% thinner than its predecessor, the iPad 2, comes in black and white, and has a dual core Apple A5 processor, in April this year.
Motorola has said it has shipped 250,000 units of Xoom, which runs Android 3.0 Honeycomb, in its latest quarterly report. RIM launched the PlayBook to consumers April 19. T-Mobile recently put on sale the LG G-Slate Honeycomb tablet. Samsung handed out 5,000 Galaxy Tab 10.1s at the Google I/O conference this month, but the table won't be available until June. Hewlett-Packard is delivering this summer its TouchPad tablet, which will have a 9.7-inch screen, will run on the webOS 3.0 operating system, and powered by a 1.2GHz dual-core.
Microsoft Inc., which had its net income eclipsed by Apple for the first time in two decades, plans to release a version of Windows optimized for touch-screen tablets next year.
In a bid to address the tablet market, Intel on Wednesday unveiled plans to introduce more than 10 new tablet personal computer models that run on its own chips.