Tablets Biting Into PC Sales: Analyst

STAMFORD, Conn. ( TheStreet) - The PC market is feeling the pressure from consumer devices such as Apple's ( AAPL) iPad and games consoles, according to the latest research from analyst firm Gartner.

Gartner says that worldwide PC shipments grew just 3.1% year over year during the fourth-quarter of 2010, as tablets and gaming devices such as Microsoft's ( MSFT) Kinect gain in popularity. Gartner had originally forecast fourth-quarter growth of 4.8%.
Tablets are increasing the pressure on PCs, says Gartner.

"Holiday PC sales were weak in many key regions due to the intensifying competition in consumer spending," explained Mikako Kitagawa, principal analyst at Gartner, in a statement. "Media tablets, such as the iPad, as well as other consumer electronic (CE) devices, such as game consoles, all competed against PCs."

Tablets are set to be one of the big trends of 2011. A slew of companies, including Dell ( DELL), Motorola ( MMI), Research In Motion ( RIMM) and Toshiba are jumping on the tablet bandwagon, and the recent CES show was dominated by the touchscreen technology.

Cannibalizaion of PCs by tablets could spell big news for some of tech's biggest names, including HP ( HPQ), Microsoft and Intel ( INTC), which reports its fourth-quarter results after market close on Thursday.

Gartner, however, says that the corporate PC market is healthier than its consumer counterpart. "The bright side of the PC market during the fourth quarter of 2010 was a steady growth in the professional market driven by replacement purchases," explained Kitagawa, adding that the broader PC market bounced back from the recession in 2010. "However, the PC market will face challenges going forward with more intensified competition among consumer spending."

HP maintained its number one position in the worldwide PC market, according to Gartner, with solid corporate growth offset by consumer weakness. Acer held onto second spot during the fourth quarter, followed by Dell, Lenovo and Toshiba.

--Written by James Rogers in New York.

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