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Tablets to Cannibalize PC Sales: Report

Stocks in this article: AAPL

NEW YORK ( TheStreet) -- Research firm Gartner cut its annual forecast for PC shipments, noting that tablets like Apple's (AAPL) iPad will eat away at PC sales.

Global PC shipments should total around 352.4 million units in 2010, an increase of 14.3% over last year, but down from Gartner's previous estimate of 17.9% growth.


The firm also lowered its PC projections for 2011 to 15.9% growth over the previous year, from an earlier estimate of 18.1% growth.

PC market growth will be impacted by devices like tablets and smartphones that provide "on the go" media consumption that could serve as substitutes for PCs down the road, the report said.

Media tablets are expected to displace around 10% of PC units by 2014, Gartner research director Ranjit Atwal said in a press release.

While there are few tablets offerings on the market today, a host of manufacturers are slated to release new devices in the U.S. next year, including Research in Motion (RIMM), Acer and Lenovo.

Manufacturers will sell 70 million tablets next year, with Apple's iPad representing almost 60% of this figure, FBR Capital Markets analyst Craig Berger predicts.

If PC vendors want to remain competitive in the future, they must differentiate themselves through innovate services and technology rather than unit volume and price, the Gartner report said.

Other factors may challenge the PC industry including the extension of average PC lifecycles, the shrinking consumer wallet and the emergence of hosted virtual desktops.

--Written by Olivia Oran in New York.

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