Slowing PC Sales Not Just about Tablets. Cloud Storage a Factor Too

by Brandy Betz | March 14, 2012 6:00 am

Slowing PC Sales Not Just about Tablets. Cloud Storage a Factor Too

Research firm Gartner predicts that PC sales will rise 4.4% this year, with further increases to follow in 2013. The reasons for the only-marginal gain: increased mobile device adoption and greater shifts toward cloud storage.

The Gartner report estimates that this year’s global PC shipments will reach 368 million units in 2012, while 400 million are expected in 2013. The increases look paltry compared to forecasted tablet sales. According to Forrester Research, there will be 112 million tablet owners in the United States alone before 2016, amounting to domestic sales of 293 million tablets in a four-year span.

Purchasing trends appear to indicate that consumers are willing to hold onto an outdated PC longer, and spend part of the savings on a new tablet. Tablets offer mobility that exceeds even that of Ultrabooks, the thin, light PCs Gartner expects will generate the most interest in the PC category. Apple (NASDAQ:AAPL[1]), whose MacBook Air fits the Ultrabook profile nicely, has taken to calling this the “post-PC” era due to the continued popularity of the company’s iPad devices. Combined, iPad and Macs sold more units in Q4 than any PC company.

Tablets do have had their own set of weaknesses. Owners have complained[2] about a lack of Microsoft (NASDAQ:MSFT[3]) Windows integration that would bring familiar business tools to the mobile devices. The forthcoming release of the Windows 8 operating system, including a version designed to operate on touchscreen devices such as Nokia’s upcoming 10-inch tablet, is intended to answer that complaint.

The benefits of the cloud

The other issue comes down to storage. Tablets currently have an average of 16 gigabytes (GB) of internal storage. Ultrabooks, the closest comparable PCs, average from 128 to 256 GB. There are various ways to achieve more storage in either machine, but the industry push toward consumer cloud storage could decrease the importance of embedding storage on desktop and mobile devices.

Cloud data storage is a third-party service. The Kindle Fire from Amazon (NASDAQ:AMZN[4]), for example, utilizes the company’s own cloud servers to allow customers to purchase and download media well beyond the limited 8 GB of internal storage on the device. The strategy boosted sales of the device and its related products while helping compensate for the Fire’s deeply discounted price.

Still, the PC isn’t irrelevant, even as mobile devices and services continue to improve. Tablets are still evolving toward a functional middle ground, and if Windows 8 for PCs is a hit, it could help keep the PC market relatively healthy. The newly launched Ultrabooks, under production from companies including Acer[5], could boost PC sales more than market researchers expect. Analyst projections can be helpful, after all, but they’re not definitive.

Endnotes:
  1. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  2. Owners have complained: http://investorplace.com/2012/01/the-holiday-spike-in-tablet-sales-aapl-amzn-bks/
  3. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  4. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  5. Acer: http://investorplace.com/2012/02/acer-returns-to-profit-pushes-revised-strategy-lnvgy-aapl-goog/

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