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iPad taking some bite out of PC sales, says iSuppli

Reporting a slight decline in first-quarter PC shipments compared with last year, IHS iSuppli believes the iPad and other tablets have cut into PC sales, hitting Netbooks more than larger laptops.

Demand for the iPad and other tablets has taken a certain toll on PC sales, thought it's mostly the lower-end Netbook market that has suffered, according to data released yesterday by IHS iSuppli.

Worldwide, PC shipments slipped to 81.3 million during the first quarter, a drop of only 0.3 percent from the 81.6 million shipped in the year-ago quarter. Looking at the top five global PC vendors, HP, Dell, and Acer all saw a decline in shipments from a year ago, while Lenovo and Toshiba watched their shipments rise.

Among the five, Acer took the biggest hit, with its shipments dropping by more than 20 percent from 2010's first quarter. IHS iSuppli attributed Acer's decline to its heavy focus on selling Netbook-style PCs, which it sees as the segment most directly affected by the demand for the iPad and other tablets.

IHS iSuppli

"The increasing momentum of the media tablet market, led by the iPad, is creating a difficult environment for the PC industry," IHS analyst Matthew Wilkins said in a statement. "All the attention surrounding tablets contributed to weak consumer demand for PCs in the first quarter."

However, the analyst admits there's still uncertainty over exactly how much of an impact tablets are having on the PC market.

"IHS believes that the jury is still out on exactly how much tablets are cannibalizing PC sales," Wilkins said. "However, the rising number of tablet models on the market, along with certain high-profile product launches during the first quarter, caused confusion among consumers as to exactly how to view the tablet platform relative to the PC platform. This contributed to the PC sales decline in the first quarter."

The slight decline in first-quarter PC shipments surprised IHS iSuppli since the fourth quarter set a record in global PCs sales. But the firm believes the market should bounce back later in the year. Its current forecast calls for the global PC market to grow by 8 percent, shipping an estimated 373 million units, up from 345 million last year when the market rose by 14 percent.

Other analysts have been debating how much of a factor the iPad and other tablets have had in cannibalizing PC sales.

A recent report from NPD Group pointed the finger not at the iPad but at a downturn following an explosion in PC sales in late 2009 after Windows 7 launched and Netbook demand was at a peak. And contrary to IHS iSuppli's findings, NPD found that the low-end notebook market has actually held up well, while higher-priced laptops have taken the biggest hit.

A recent study from Forrester found that consumers who buy a tablet are more likely to have bought a PC over the last two years. One conclusion is that people are buying tablets more as replacements for a second or third PC rather than as an alternative to their main PC.