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Can PCs Survive as Sales Wane?

/ Source: TechNewsDaily

Tablets and smartphones threaten to make laptops and desktop personal computers obsolete for many consumers as they offer computing power increasingly close to that of a laptop but in a smaller, more mobile package. Instead of calling it quits, however, PC manufacturers are fighting back.

The laptop — considered the mobile version of the PC — is already getting a makeover.

Over the next two years, laptops will become thinner and lighter, run all day on a battery charge, have instant-on capability (as ultrathin, ultralight Macbook Air laptop already does), touchscreen interfaces in addition to keyboards, and run multiple operating systems, Paul Otellini, Intel CEO, told analysts recently.

Intel's first big move into this smaller-device market, the Ultrabook, was announced Tuesday. Intel’s executive vice president Sean Maloney said the Ultrabook will be available for the 2011 winter holiday shopping season, and will come in a thin package — less than 0.8 inches (20 millimeters) — and priced at under $1,000.

Slowing PC market

Meanwhile, personal computer sales are waning. But manufacturers insist the sector is not dying.

Both HP and Dell — the world's two largest manufacturers of personal computers — recently reported sharp drops in sales to consumers. PC sales to individuals plunged 23 percent at HP and 7 percent at Dell. While businesses are still buying PCs, consumers are quickly shifting to other devices.

"Part of that lowering is a reflection of users in mature markets, especially consumers, who've really been driving PC sales, holding back their purchases and spending their disposable income on other devices, which is distinctly different from saying [they are] replacing their PCs with other devices," said Ranjit Atwal, a research director at financial analysis firm Gartner.

"What we're seeing now is that consumers have a lot more choices," Atwal told TechNewsDaily. "The point here is as users evolve, they’ll need different devices for different things."

He likens the shift to the radio industry: "The radio never disappeared, it just morphed into different things," Atwal said.

“Tablets, while great for content consumption and social networking, aren’t necessarily suitable for other computing activities that many users look to do on a regular basis,” said Dell spokesperson Ellen Murphy. “For example, many people will still look to a laptop to do homework, write documents, spreadsheets or large emails, or content creation and multimedia activities such as photo and video editing,” Murphy said. "Likewise, you can’t store a large music or video collection on a tablet, nor play a graphics-intensive video game."

[Also read "PCs Not Dead Yet."]

Growing 'device' market

Those in the PC industry say they've heard the morbid forecasts for their product before, and they've survived.

“We do not expect the PC to become obsolete,” said Aakre, the Intel spokesperson. “Many have predicted the death of the PC for a long time and we do not believe it’s happening.”

Worldwide PC shipments will reach 440.6 million units in 2011, a 13.6 percent increase over 2010, while mobile PCs will reach 387.8 million units in 2011, a 10.5 percent increase over 2010, according to Gartner’s latest forecasts.

"We expect growing consumer enthusiasm for mobile PC alternatives, such as the iPad and other media tablets, to dramatically slow home mobile PC sales, especially in mature markets," George Shiffler, a research director at Gartner, said in a statement.

"We once thought that mobile PC growth would continue to be sustained by consumers buying second and third mobile PCs as personal devices," Shuffler added. "However, we now believe that consumers are not only likely to forgo additional mobile PC buys but are also likely to extend the lifetimes of the mobile PCs they retain as they adopt media tablets and other mobile PC alternatives as their primary mobile device."

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