PC sales hit a wall in 'post-PC' world

@CNNMoneyTech March 8, 2012: 12:06 PM ET
Tech shoppers are increasingly opting for tablets instead of PCs.

Tech shoppers are increasingly opting for tablets instead of PCs.

NEW YORK (CNNMoney) -- On the heels of Apple's declaration Wednesday that a "post-PC" world has arrived, new data released Thursday showed bad times ahead for the already beaten-up personal computer.

PC shipments are on pace to grow just 4.4% this year, according a Gartner estimate. That's better than last year, when shipments of PCs were flat, but the forecast is far below Gartner's initial growth estimate of 10.5%.

A tough economy and hard drive supply constraints related to last year's Thailand floods have contributed to weak demand for PCs. But the the primary reason for the sales slump, Gartner said, is Apple's (AAPL, Fortune 500) iPad and other tablets.

"PC shipments will remain weak in 2012," said Ranjit Atwal, research director at Gartner. "PCs will face more competition as we see new media tablets based on operating systems from Android and Microsoft, as well the new iPad."

Consumer computing habits are changing as more applications shift to the cloud. Email, Web browsing and social networking, which once required a PC, can now be done on a smartphone or tablet.

Even content creation tasks like photo editing, word processing, and music creation are migrating to tablets. Though PCs are still the best for those kinds of applications, Atwal said consumers have shown that they are willing to make trade-offs for tablets' better content consumption capabilities.

"The real question is whether Windows 8 and ultrabooks will create the compelling offering that gets the earlier adopter of devices excited about PCs again," Atwal said.

Microsoft (MSFT, Fortune 500) released its Windows 8 consumer preview last week, and the software giant is set to launch its dramatically revamped PC operating system later this year. By bringing touch, an entirely new user interface, and a new mobile chip architecture to the Windows platform, Microsoft has opened the door for hardware and software makers to change the definition of what makes a PC.

Frank Shaw, Microsoft's chief spokesman, quipped on Twitter Wednesday that Windows 8 will be "the first post-'post-PC'-PC."

The anticipated appeal of Windows 8, combined with sleek, super-thin new ultrabook PCs coming to market, may be enough to give the PC market a much-needed jolt -- next year.

Can Windows 8 save the PC from extinction?

Gartner predicts that ultrabooks won't take off until the end of 2012, around the time that Windows 8 is expected to launch.

Despite much buzz, ultrabooks' high prices and small selection have limited demand, according to a Sterne Agee report. Cheaper designs that can be built with plastic and without fans are slated to be released this fall.

Gartner believes PC shipments will pick up by the end of 2013, rising by a healthier 8.7% next year.

Almost all of that growth will come from emerging markets. In North America and Western Europe, customers will continue to only buy PCs when one needs to be replaced, Gartner said.

Meanwhile, emerging markets like Latin America, the Middle East and southeast Asia will increase their share of the overall market from 50% last year to 70% in 2016. Many in those regions are buying a PC for the first time. To top of page

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