Soaring iPad Sales Again Fuel Talk of Fading PCs

With consumers watching their budgets during tough economic times, said analyst Jeff Orr, "Monies that may have been historically used for upgrading the home computer are now being considered for incremental home devices, including tablets" like Apple's iPad. Apple sold 15.43 million iPads in the fourth quarter, more than all the PCs by HP.

The news keeps getting better and better for Apple, with its $13.06 billion in net income (double last year's figure) in the quarter ending in December, driven largely by a doubling of iPhone and iPad sales.

Apple's new CEO, Tim Cook, said the company sold 37.04 million of the trend-setting smartphone in the quarter and 15.43 million of the market-building tablet computer in the quarter. The iPad figure is a whopping 111 percent increase over sales in the same quarter last year, and ahead of predictions.

The iPad 2, thinner and faster than its predecessor and with dual cameras, was released less than a year ago, in March.

Analysts and media were quick to note that the surge in iPad sales put the device ahead of personal computer sales by a leading manufacturer, Hewlett-Packard, for the same quarter. HP sold 14.7 million computers in that time period, according to Gartner.

Overall, worldwide PC shipments declined slightly, by 1.4 percent, to 92.2 million units in the fourth quarter of 2011, compared with the same period of 2010, after two quarters of positive growth.

Separate research from IDC found that HP shipped 15.1 million computers, while Lenovo shipped 13 million and Dell, 11.9 million.

Last year, an analysis by J.P. Morgan said tablets cannibalized about 18 percent of the PC market in 2010.

"I truly believe, and many others in the company believe, that there will come a day that the tablet market is larger than the PC market," Cook said in an earnings call late Tuesday with Wall Street analysts, as reported by Computerworld.

But how soon that happens depends on how we define PCs, said Jeff Orr, ABI Research's group director for consumer and mobile consumer electronics research.

'[Cook's] comments have to be placed into context, such as what constitutes a PC -- desktops, laptops, netbooks, etc. -- and if the devices are addressing similar market needs," Orr said. " Also relevant is that Apple acknowledged that iPad is impacting the sale of Macs."

Orr noted that the mobile phone market has also "dwarfed" the all-inclusive PC market.

"Yet no one is out touting that the PC is dead because of the handset," he said. "The media tablets today are not a replacement for desktop or laptop PCs, and consumers we survey don't even find them in the same consideration set."

Orr noted, however, that with consumers watching their budgets during tough economic times, "Monies that may have been historically used for upgrading the home computer are now being considered for incremental home devices, including tablets."

Geography is also part of the equation. Orr said the choice between PC's and tablets is currently restricted to North America, Western Europe, Japan and South Korea, which have highly competitive broadband markets and home networking.

"Most of the world still has yet to experience its first PC at home," he said. " In some countries, the first Internet experiences will occur on a handset, while others may look to affordable tablets."

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