Have rumours of the PC’s death been greatly exaggerated?

A new report suggests tablets are not cannibalizing PC sales as much as expected

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Since the debut of the iPad last year, every major technology company—from chipmakers to hardware vendors to software providers—has been clamouring to get involved in developing tablets. Sales of the iPad blew past the expectations of many forecasters, and analysts later found evidence that tablets were eating into PC sales. This prompted some publications (cough) to ask whether the PC was headed to the scrap heap for good.

Evidence has continued to mount. Last month, research firms IDC and Gartner reported PC shipments fell in the first quarter of this year by 3.2% and 1.1% respectively, and Gartner cited the tablets as a key culprit.

But research firm NPD Group has always taken a more sobering view of the tablet situation than most. It issued a new report this week arguing that weak PC sales have little to do with the growth in tablets. Instead, global PC sales are coming down from record highs thanks to the launch of Windows 7, which prompted an upgrade cycle for both businesses and consumers. Having purchased PCs just recently, few consumers have a reason to buy another one, the report argues. NPD also found that only 14% of iPad buyers ditched a PC purchase for a tablet, and that number has fallen to 12% in recent months.

Stephen Baker, NPD’s vice-president of industry analysis, has made similar arguments before on his blog. During the first round of cannibalization news, he wrote, “There is very little hard evidence that the iPad is killing notebook sales and to say so represets the height of hysteria and speculation.”

Another report from NPD’s Canadian division released today found that only 6% of Canadians own a tablet—the same percentage that own e-readers. “We thought the number would be higher,” says Darrel Ryce, director of technology and entertainment with NPD in Toronto. “Certainly in this day and age, with technology being adopted at a significant rate, it was a surprise.” Tablets are still in the early adopter phase, he says, pointing out that current users tend to be relatively affluent.

Still, the Canadian survey did show that 65% of those surveyed who intended to buy a tablet believe no other computer device is required. That would suggest PCs could see significant sales declines down the road, although Ryce points out intentions can always change. “They may look at tablets now with rose-coloured glasses, and think that they’re going to do lots of things for them,” he says. They may find that they still need PCs even after they become tablet users.

It’s far too early to say for certain what kind of impact tablets will have on the PC market, but it’s unlikely they are the passing fad that some have portrayed. But they’re also probably not a PC slayer, either. As CB wrote in the fall, there may be room for three devices in the market–smartphone, tablet and PC. 

What the tablet does represent is a new battleground pitting the established PC players (mainly Microsoft and Intel) against a host of savvy newcomers. And with millions of tablets being sold, no one wants to miss out.

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