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Summary:

A UBS research note today upgrades its expectation of tablet sales this year while simultaneously knocking down its expectation of the PC industry’s growth. The opposite trajectories of PC and tablets show that, yes, in some cases people are buying a tablet instead of a laptop.

lots of tablets

lots of tablets

Updated. Wednesday, UBS sent a research note that increases its forecast for the number of tablets sold this year, while simultaneously knocking down its expectations for the PC industry’s growth. The opposite trajectories of PC and tablets indicate consumers are, in certain cases choosing to opt for a tablet instead of a new laptop. And that’s not great news for PC makers, since right now not many are buying their tablets either.

Update: For the tablet forecast, UBS says it was driven to update that number based on Apple’s rather stunning revelation last week that it sold more than 20 million 9 million iPads between April and June this year. The research group also manages to sneak in a little “I-told-you-so” regarding the overall growth of the tablet market while it’s at it:

We are raising our 2011 tablet forecast to 60 million from 55 million and 2012 to 90 million from 80 million. The vast majority of our forecast change is a result of our upward revision to our Apple iPad forecast (37.9 million from 32.3 million in 2011 & 53 million from 46.9 million in 2012), implying ~63% share of the market. We believe consensus is near our once-controversial 55mn forecast but is likely to rise.

So why are people flocking to touchscreen tablets? UBS says, “We believe the tablet ramp is being driven by utility (a number of use cases for consumer as well as enterprise that help to drive demand) and broader distribution.”

Essentially, people are buying tablets because they are finding lots of different ways to use them. Of course, a tablet is not the perfect replacement for a laptop, but their skyrocketing popularity — all while PC sales are barely growing at all — makes it clear at least some people seem to be OK with less-than-full-PC functionality for basic stuff, like browsing the Web, tapping out a few e-mails, watching videos, checking Facebook and shopping online.

The UBS note added that the group’s “anecdotal retail checks indicate generally soft sell-through of non-iPad tablets,” which is a really nice way of saying people aren’t exactly lining up to buy Android tablets, BlackBerry PlayBooks or HP TouchPads. After Apple’s 37.9 million iPads UBS is expecting them to sell this year, it sees Samsung selling 5 million, Asus 2.2 million, RIM 1.9 million, Motorola 1.8 million and Acer 1.4 million.

Meanwhile in the PC industry, expectations are low. Previously UBS had expected year-over-year growth of 6.3 percent. Now, it’s estimating growth of just 4.5 percent. The report doesn’t explicitly draw a connection between the growth of tablets and decline of PCs, but plenty of others have. Research firm Gartner said earlier this year that the iPad would “dramatically” cut into PC sales .

Even Apple COO Tim Cook, who clearly has a dog in both fights, admitted to the iPad cutting into Mac sales during the company’s recent earnings report. Apple believes “some customers chose to purchase an iPad instead of a new Mac during the quarter.” He added, “But we also believe that even more customers purchased an iPad over a Windows PC. There’s a lot more of the PC business to cannibalize than the Mac.”

  1. Curtis Carmack Wednesday, July 27, 2011

    Erica, iPad sales last quarter were 9.25 million. It was the iPhone that sold more than 20 million.

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    1. Indeed. But I agree that tablets will start cutting into PC/notebook sales. Instead of buying a new notebook, people will buy a tablet, and keep their old notebook for “work” or whatever. But overall, the transition will still be pretty slow, so this won’t be extremely obvious until maybe 2013 or so when Microsoft will realize it’s not selling too many Windows 8 licenses.

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    2. Ack, yeah I wrote the iPhone number when I meant the iPad number. Thanks for catching, Curtis. Fixed now.

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  2. H. Doug Matsuoka Wednesday, July 27, 2011

    You can use an iPad in bed (like I’m doing now) or you can put it in a Ziploc baggie and do your email or even watch Netflix in the bath. Try those things with a PC.

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  3. Friendly Neigbourhood Editor Wednesday, July 27, 2011

    The numbers are mixed up in this article. Apple sold 9 million iPads last quarter and 20 million iphones.

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    1. Thanks for the comment, Friendly. We have updated with the correct figures.

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  4. I expect that the tablet form-factor will replace the laptop/desktop computing platform in 3-5 years max. With Wi-Fi Direct, it should be completely feasible to walk into your office with your tablet CPU and have it connect to your keyboard/mouse/monitor/printer/disk automatically, providing the CPU to power your operations, but giving you the desktop ease-of-use for business computing. When you leave, you simply pick up the tablet and walk out. Current tablets are underpowered because they are still secondary to the primary computing platform, but this will change.

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  5. I believe after using the Asus see Transformer, that there will be a correction in the Transformer sales numbers. This tablet leaps way beyond ipad, and its potential is just beginning to be realized. Its not for clones.

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  6. You are repeatedly referencing a UBS story but there is no link. Is there one?

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    1. Yeah I wish there was a link too, but it’s not published online. The info is all from a research note that UBS sent to clients today.

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      1. Thanks, Erica.

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  7. For me, the only nexus is something like HP’s TouchSmart, which is the best of both worlds. I don’t see myself buying a tablet because I have a DroidX Android Smartphone which is really the most practical device since getting the power and screen size of a tablet is so anticlimactic: it’s still an ANDROID, or iPod, or whatever else, and has none of the power (or potential) of a true laptop. The tablets are just so overblown, imho.

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  8. Why do writers have to re-post stories and put their own “spin” on it injecting bias and speculation?

    For the record, this survey from ABI Research points a completely different picture:

    http://news.softpedia.com/news/ABI-Research-Finds-that-Consumers-Still-Like-Netbooks-207717.shtml

    Strange, isn’t it, that massive resources of GigaOm missed that report…

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    1. Reece Tarbert Thursday, July 28, 2011

      What do you expect? This story is based on a report which, in turn, cites estimates, forecasts and even “anecdotal retail checks”! Sales figures? Nope. But, hey, who needs numbers as long as you can support your little theory?

      RT.

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    2. I don’t think you’re being fair to the author. IMO she did an excellent job of reinterpreting without spin the reasons for the UBS update and their conclusions. And by reinterpreting I mean she translated the UBS corporate speak to plain English.

      I did read the article you site from ABI and the only statistic cited in the article was from a survey they did. Well, you are comparing apples and oranges. The note from UBS was an update to their market forecast. Many people rely on these market forecasts to plan future endeavors. The conclusions from ABI (and who are they? are they reliable?) are based on a survey and, with all due respect, anyone in the survey industry will tell you that they could devise a survey to confirm that the moon is, indeed, made of cheese if they wanted to. The vital information about the ABI survey is who commissioned it. Was it someone from the netbook industry? A quick search of the internet will show that you can find a multitude of surveys coming to conflicting conclusions about just about any topic. They are not really reliable at all and there are so many of them that it’s impossible to blog about each and every one. You feel, apparently, that the ABI report is worth reporting because it comes to a conclusion that you find pleasing, not necessarily because it is reliable or accurate.

      UBS is a huge and well-respected organization. When they speak many people listen. Would you rather that it was not reported because it is pro iPad?

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      1. And how many times have market forecasts been proven wrong? As you say, there were “updating” their findings. Guess they can’t be too reliable either if they don’t take into consideration consumer opinion and purchasing trends. Facts speak louder than speculation.

        I don’t work for ABI, and while you may like what UBS says, I think I’m making a valid point that it is important to express things from a different perspective. The overwhelming majority of consumers couldn’t care less about market forecasts.

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  9. Interesting stuff. Seems that growth the PC market in recent years has been driven by 2nd and 3rd PC’s in the home (at least in mature markets). I’m skeptical that people are replacing their primary PC with a tablet, but its very easy to picture tablets replacing the 2nd-nth PC.

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  10. No, tablets are not eating PC’s lunch. iPads are eating the PC’s lunch.

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    1. Based on what data? Nobody has proven tablets are cannabilizing pcs. Only 13% of Ipad owners indicate they purchased one instead of a standard computer. 13% of 9M per quarter is what? 1.5M tops? Comparing that to a mature pc market of 400M worldwide is nuts. People are, for the most part, purchasing tablets as add-on devices, not replacments.

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