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Tablet PCs bite into netbook, notebook sales

Posted: 09 Jul 2010 ?? ?Print Version ?Bookmark and Share

Keywords:tablet PC? netbook? notebook? x86? processor?

The success of tablet PC is expected to pull down sales of notebook and netbook computers, shifting some business away from x86 chips and Windows toward ARM-based processors and Google Android, according to Barclays Capital.

Barclays issued a set of reports that run down the implications for the mobile supply chain of the rise of tablets in the wake of the success of the Apple iPad. If the predictions are accurate, the new mobile form factor could be the first to drive a measurable shift toward alternative architectures, chipping away at the long dominant Windows-Intel duopoly in computing.

Analysts at the Wall Street firm project sales of 15 million media tablets this year, rising to 28 million in 2011, 70 percent of them for the ARM-based Apple iPad. Barclays estimates 30 to 40 percent of the tablet purchases will be made instead of purchases of netbooks and notebooks, just as the netbook cannibalized a similar percentage of notebook sales.

Thus Barclays is reducing its forecast for netbooks from 19 percent unit growth in 2010 to nine percent growth and sales of 35 million units. It expects netbook sales will actually decline 20 percent in 2011 to sales of 28 million units.

Barclays is also shaving four percent off its forecast of notebook computer sales. It now expects 34 percent notebook growth in 2010 to 183 million units and 25 percent growth in 2011 to 229 million units.

Although the analyst firm sees no change in desktop and server sales, the tablet shift results in a lowered overall PC forecast from 21 to 19 percent growth in 2010. Notebooks are the fastest growing segment of the PC industry.

Chip winners, losers
The rise of tablets will give a boost to ARM and a host of associated chipmakers, while Intel and AMD will take a minor hit, according to Barclays.

"The primary change comes in our Atom-based netbook forecast which slips from 20 percent growth at 44 million units to 40 million units in 2010 and from 21 percent growth at 53 million units to around 10 percent growth or 44 million units for 2011," a Barclays report said.

Barclays sliced one to two percent of growth off its overall forecast for x86 processors. It now estimates the group will grow 18 percent to 398 million units in 2010 and 11 percent to 443 million units in 2011.

The analyst firm maintained its positive rating on Intel. However it said "investor perceptions of growth in tablet shipments [will] impact sentiment and the multiple afforded to Intel."

Barclays expects Intel will respond to the pressure with a lower-powered Medfield processor in 2011 aimed at x86 tablets.

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