Is it the beginning of the end of PC era?

BANGALORE, INDIA: By lowering India’s growth forecast by 0.7 per cent to 6.1 per cent for 2012, the steepest cut for any nation, the International Monetary Fund (IMF) has sounded a new alarm.

“Growth momentum has also slowed in various emerging market economies, notably Brazil, China, and India. This partly reflects a weaker external environment, but domestic demand has also decelerated sharply in response to capacity constraints and policy tightening over the past year,” said IMF.

As asserted by IMF, the weak economy has a major impact on domestic demand, even for computers. During the second quarter of 2012, worldwide PC shipments slipped 0.1 pc compared to a year ago, according to IDC's quarterly PC Tracker. The report also said the shrinking demand for PCs was basically to do with looming transition to tablets and the poor economic situation across the world.

Gartner analyst Mikako Kitagawa said: "Uncertainties in the economy in various regions, as well as consumer's low interest in PC purchases, were some of the key influencers of slow PC shipment growth."

Media tablets have impacted the sale of desktops as consumers are delaying purchase of computers, waiting for low-cost tablets to hit the market. A report by ABI Research said that tablet computers are expected to overtake notebook PCs by 2016 as consumers shift to newer devices like the Apple iPad.

Perhaps, it's time the companies make a transitional change to replace computers with tablets or ultrabooks. Share prices of Taiwanese PC company Acer fell by 3.02 pc after the company cut its shipment forecast, citing weaker-than-expected PC demand.

Taipei Times quoted Acer spokesman Henry Wang as saying: “Acer’s PC shipments and profit margins have not been as good as we originally expected. Also because of the persistent eurozone debt crisis and the global economic downturn, the company has turned more conservative about outlook for the third quarter and the whole year.”

The quarterly report from research firm Gartner showed PC shipments, excluding tablet computers, totaled 87.5 million units in the second quarter of 2012, a small drop year-over year.

This quarter, HP dominated the worldwide market with 14.9 PC market share, despite a 12 pc dip in shipments for the quarter. Even Dell Inc's shipments fell 12 pc, according to Gartner.

However, there are some optimistic signs sent out by Lenovo, whose shipments increased by 15 pc. The rise has been mainly attributed to demand for its products in China. Also, Acer shipments rose 3.6 pc in the latest quarter and the company captured an 11 pc market share.