Apple 2.0

Covering the business that Steve Jobs built

Gartner: The PC industry blew it

November 29, 2010: 12:00 PM ET

The chickens are coming to roost for manufacturers that failed to innovate

Photo: The Hays County Roundup

"PCs are still seen as necessities," writes Gartner research director George Shiffler in a press release issued Monday. "But the PC industry's inability to significantly innovate and its overreliance on a business model predicated on driving volume through price declines are finally impacting the industry's ability to induce new replacement cycles."

Shiffler's harsh words come at the end of a Gartner report warning clients not to expect worldwide PC shipments to exceed 352.4 million this year -- only 14% more than 2009 and considerably less than the 17% growth Gartner predicted just last September.

"These results reflect marked reductions in expected near-term unit growth based on expectations of weaker consumer demand, due in no small part to growing user interest in media tablets such as the iPad," said Ranjit Atwal, another Gartner research director.

By 2014, Atwal expects tablets made by Apple (AAPL) and others to displace around 10% of PC sales.

The chickens, according to Gartner, are coming to roost for PC makers that failed to anticipate -- as Apple did -- the popularity of mobile Internet devices like the iPhone and the iPad.

Raphael Vasquez, yet another Gartner analyst, put it this way:

"PC market growth will be impacted by devices that enable better on-the-go content consumption such as media tablets and next-generation smartphones. These devices will be increasing (sic) embraced as complements if not substitutes for PCs where voice and light data consumption are desired. It is likely that desk-based PCs will be adversely impacted over the long-term by the adoption of hosted virtual desktops, which can readily use other devices like thin clients."

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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