Market researchers at Gartner slashed their 2011 and 2012 projected growth rates for personal computer sales. The weakening economy is a large factor but substitution effects are also cited. As I have said before, laptop sales overtook desktop sales when both formats were more than good enough to meet users' needs. More and more powerful smartphones and tablets will have a similar effect.
"Media tablets have dramatically changed the dynamic of the PC market and HP's decision to rethink its PC strategy simply highlights the pressure that PC vendors are under to adapt to the new dynamic or abandon the market," said George Shiffler, research director at Gartner. "Vendors' tried and true business models are failing as traditional PC functionality is extended to other devices, and users continue to lengthen PC lifetimes. Vendors only seem to be flailing as they look for quick fixes to their problems. Unfortunately, the resulting chaos is just creating more confusion across the entire PC supply chain, impacting sell-in."
-Gartner press release, September 8, 2011
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