Bitter pill for PC market

Tablets will disrupt the traditional PC market, but the impact will take time to filter through to SA, because the “cool” electronic gadgets will take a while to reach local shelves.

Globally, PC sales are expected to slow on the back of new and exciting tablet products being launched.

However, local consumers currently do not have much to choose from. There are only a handful of tablets battling it out for consumer attention in SA, such as the recently launched iPad first edition, the original Samsung Galaxy Tab and the Dell Streak.

South Africans will have a long wait for more choice, as the second-generation iPad and Galaxy have yet to enter the local market. While Research In Motion will launch the PlayBook in the US and Canadian markets on 19 April, no launch date has yet been set for SA. Media reports indicate the Motorola Xoom tablet will arrive on local shelves in April.

Tablets will eat into the traditional desktop and notebook markets, and the local market will also be disrupted once the tablets land in SA and start flying off shelves.

International research house Gartner has lowered its PC unit forecast for this year and next year, because there will be weaker demand for the electronic goods on the back of growing interest in tablets.

Worldwide computer shipments are forecast to reach 387.8 million units in 2011, only a 10.5% increase from 2010, according to Gartner's preliminary forecast. This is down from Gartner's previous projection of 15.9% growth this year.

Ranjit Atwal, research director at Gartner, says the weaker demand is because of a decline in consumer enthusiasm for mobile PCs.

“We expect growing consumer enthusiasm for mobile PC alternatives, such as the iPad and other media tablets, to dramatically slow home mobile PC sales, especially in mature markets,” adds George Shiffler, research director at Gartner.

“Overall, we now expect home mobile PCs to average less than 10% annual growth in mature markets from 2011 through 2015,” says Shiffler.

“The current 'cool' device is the smartphone, and now PCs will soon have to do battle with media tablets when they are launched in large numbers in the second quarter of 2011,” says Shiffler.

Mobile PCs, says Gartner, are still too heavy and don't have sufficient battery life to make them truly mobile. Tablets compete well on these criteria.

At the Mobile World Congress, in Barcelona, last month, Google CEO Eric Schmidt said: “It's already over - we know that smartphones and tablets are the new destination.” He pointed out that smartphones started out-selling PCs as of the beginning of February. “And PCs aren't going to catch up.”

Arthur Goldstuck, MD of World Wide Worx, says there is a great appetite for tablets, but they do not replace PCs in any way at this stage in terms of their functions. He points out they have yet to directly impact the market.

The idea of the tablet as a game-changer is an exaggeration in the short-term, but in the long-term they will change the entire PC industry, says Goldstuck. “This is the year of the tablet entering the market, not the year of the tablet changing the market.

“The key issue surrounding the devices in SA is availability, since none of them are currently available locally apart from the original iPad.”

While the Samsung Galaxy Tab1 and the Dell Streak are available, they are not viewed as competitors because the screen is much smaller and less user-friendly.

As for tablets breaking into the mass market, prices must first come down considerably, adds Goldstuck.

Hannes Fourie, senior analyst of systems and infrastructure solutions at research house IDC, believes tablets will disrupt the local PC market, but this won't happen overnight.

He says tablets will be bought as an additional computing item for people who want light-weight mobility, but won't replace the notebook as tablets do not have the necessary computing power to create documents.

However, adds Fourie, tablets will open up a new consumer segment of the market, and will be purchased by people who have not traditionally owned notebooks or desktop PCs. He says tablets will spur growth in the overall market, which will filter through to sales of wireless keyboards and external monitors.

Duncan Fisken, VP of Aruba Networks EMEA, says there is a “groundswell of momentum” building in the local market surrounding tablets and the iPad, specifically.

“The local market is essentially 18 to 24 months behind the US and Europe, but devices like the iPad offer the opportunity to close the gap by essentially leapfrogging technology,” he comments.

“The iPad has changed the game and even changed my own interactions and the way I do business,” Fisken points out. He was “anti-Apple” before being converted by his iPad.

Journalist and author Gus Silber says his iPad has “made a big difference” to the way he “computes”. “I'm a gadget junkie with an unhealthy obsession for Apple devices, although I must confess that I wasn't initially attracted to the iPad, I thought it was an unnecessary device, because I already use Macs and a MacBook and an iPhone,” says Silber.

However, he adds, Apple has created an entirely new market for consumer technology by introducing devices “that you didn't know you needed until you lay your hands on them”.

According to local Apple distributor, Core Group, iPad sales have “exceeded expectations” locally. Core spokesman Taryn Hyam says the iPad is leading the market.