PC sales have gotten off to a slow start this year due to the "greater than expected" cannibalization of the market by smartphones and tablets, particularly the Apple iPad, according to a Tuesday analyst report.
The consumer market is "being usurped" by the Apple iPad, according to Deutsche Bank analyst Chris Whitmore.
The "astounding success" of the iPad 2 prompted Whitmore to drop his 2011 PC growth predictions from 9 percent to 4 percent, and up his overall 2011 tablet sales estimates from 40 million to 45 million. By 2012, consumers will probably snap up 70 million tablets compared to his original 60 million prediction, he said.
Of that 45 million, about 35 million will be iPads, Whitmore said. There will be "healthy demand" for the iPad 2 in multiple quarters as Apple starts selling it in more and more countries. As a result, the iPad will likely cannibalize more than Deutsche's original 30 percent estimate, at the expense of PC vendors like Acer and HP.
PC manufacturers have introduced tablets of their own in recent months, and Whitmore expects a "slew" of new tablets in the next six to nine months. But "we remain skeptical whether the likes of HP, Dell, Motorola, Samsung, and RIM etc can close the competitive gap on iPad 2," he wrote.
"Non-iPad tablets will underwhelm," Whitmore concluded.
Weak PC demand in Europe and the U.S. meanwhile, is "directly related to pressure from both the iPad and smartphones," Whitmore wrote. "The tactile and intuitive characteristics of touchbased tablets offer a differentiated user experience compared to traditional consumer PCs at similar price points."
Corporate demand for PCs, however, remains healthy and shows no signs of slowing down. There will likely be some consumer improvement in the second quarter, but not enough to fully compensate for the slow start to 2011, Whitmore predicted.
Deutsche decided to re-evaluate its global PC model after disappointing guidance from Acer, which just ditched its CEO and president amidst a divide over the future of the company.