Apple takes a bite out of PC market

Dana Franklin
D. Franklin|04.14.11

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Apple takes a bite out of PC market

PC with bite taken out of itFor the first time in six quarters, worldwide shipments of personal computers declined during the first three months of 2011, according to reports from Gartner Inc. and International Data Corp. (IDC) released this week. Despite faltering demand for PCs, Apple enjoyed increased sales and market share compared to the year-ago quarter.

IDC's report indicated 80.6 million PCs shipped worldwide during the quarter -- a 3.2% decline from the same time last year. Gartner's figures showed sales dipped by 1.1% to 84.3 million units. In the United States, both firms agreed PC sales dropped from about 17 million units in the first quarter of 2010 to about 16.1 million PCs this year. Meanwhile, Apple watched its figures grow in the US, netting either 8.5% or 9.3% of the market -- a healthy jump from the 7% share the Cupertino-based company saw at the start of 2010.

Apple's iPad may have also taken a significant bite out of PC sales. IDC said tablets like the iPad, which weren't included in either reporting firm's PC shipment calculations, contributed to shrinking demand for more powerful -- and more expensive -- notebooks and desktops.

"With the launch of the iPad 2 in February, more consumers either switched to buying an alternative device, or simply held back from buying PCs," said Gartner analyst Mikako Kitagawa.

A recent survey by Google-owned AdMob supported the idea that tablets are changing consumer habits. In the survey, 43% of the respondents said they spend more time using their tablets than their PCs. These changing habits may lead more consumers to ditch their PCs for iPads or other tablet devices.

Although the dip in sales and early indications of changing customer habits sound gloomy, it's premature to predict impending doom for the PC market. Personal computers continue to get faster and more capable, extending their usable lifetimes; people may simply be holding onto their PCs for longer and choosing to postpone upgrades until the economy more fully recovers. Political unrest in the Middle East and last month's earthquake in Japan contributed to softened demand in those regions. Gartner said PC shipments in Japan declined 13.1% in the first quarter. And companies like Apple and Lenovo both saw increased sales in their respective PC families, sparking hope that the PC industry can still find opportunities to compete with phones and tablets.

"The U.S. and world-wide PC market continues to work through a difficult era that we expect will continue into next quarter, but will start to improve in the second half of the year," said Bob O'Donnell, an analyst for IDC. "While it's tempting to blame the decline completely on the growth of media tablets, we believe other factors, including extended PC lifetimes and the lack of compelling new PC experiences, played equally significant roles."

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