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Tuesday, August 07, 2012, 10:23 am PT (01:23 pm ET)

iPad will keep eating away PC market, despite Windows 8 "excitement"

Outside of Apple's Macs, sales in the global PC market have remained stagnant for several quarters, with many predicting a rebound after Microsoft ships Windows 8. But that's not going to stop the decline, an analyst with Barclays states.

There's no question that PC sales have continued to shrink, both in the US and globally, but there is some controversy about the cause. In July, IDC reported a 10.6 percent decline in US sales, and a slight decline globally. Gartner's estimates were not much better, indicating a 5.7 percent decline in the US.

Greatly increased sales of Apple's iPad, introduced just two years ago, have clearly replaced millions of PC sales among consumers, education and in the enterprise across a variety of tasks where Apple's easy to manage and use device has replaced conventional desktop PCs, full sized notebooks and economy netbooks.

In particular, the introduction of the iPad appears to have obliterated the once surging market for netbooks, which IDC and Gartner count as PCs.

Canalys, which incorporates iPad and other tablet sales in its PC shipment numbers (unlike IDC and Gartner) reported global growth of 11.7 percent, but most of that came via sales of Apple's iPad, giving the company a company a 19.4 percent combined share of PC sales and 59.6 percent annual growth, more than twice that of second place grower Lenovo.

Canalys


Cannibalization by Apple or waiting for Microsoft?

However, it remains a matter of controversy if the moribund global market for PCs is simply being eaten up by iPad sales or if buyers are instead just waiting for the upcoming release of Windows 8 (or some combination of the two factors).

In the smartphone market, there is similar controversy about why Apple's iPhone sales are slowing, but most agree that consumers are anticipating the upcoming iPhone 5 refresh, rather than buying alternatives. Every annual sales cycle of iPhones has followed the same pattern.

Addressing the optimism around Windows 8, which its supporters hope will both rebound conventional PC sales and power alternative tablet or convertible designs that compete with Apple's Windows-free iPad, Barclay's analyst Ben Reitzes wrote that the Windows 8 launch will have limited impact.

"We continue to believe," Reitzes stated, "that the rise of smartphones and the iPad are having an adverse impact on the PC market – in addition to macro [economic] factors.”

Not enough wallet in the world to grow PC market

Channel-filling shipments of new Windows 8 PCs should "improve in September meaningfully on a month-to-month basis into the launch of Windows 8 and new Ultrabooks," Reitzes wrote.

"However, after some short-term 'excitement' we believe the PC market will resume its pattern of deceleration given secular threats from tablets and smartphones," he added, "which are cannibalizing traditional PC tasks and creating all new use cases through apps."

Reitzes added, "while PCs certainly don’t go away, we simply do not believe that consumers and corporations have enough 'wallet' to grow the PC market given the need to invest in new gadgets and platforms."

The analyst predicted "stagnant PC unit growth given elongated sales cycles—with industry revenue declines that fund the growth of these new platforms."