Chris Whitmore, an analyst at Deutsche Bank, issued a note to his investors today that’s hit the tech headlines for one big reason: He suggests that while PC sales are continuing to grow over recent months, they’re proceeding at a much slower rate than industry observers had expected, with one device to blame–the iPad. Whitmore cut his prediction for the global PC market growth in 2011 to 4% year over year, down a marked amount from his previous 9% figure.
These statistics exclude tablet PCs, and in a separate prediction, Whitmore upped his expectation for tablet sales in 2011 from 40 million units to 45 million, with 35 million (a 78% share) of the devices being Apple’s iPad. Whitmore’s bank remains “skeptical” that companies like Dell, Motorola, Samsung and RIM can “close the competitive gap on iPad 2.” If they are to do so, they must “undercut on price” with a potential loss-leading sales proposition, or offer a better customer experience (something we see Google trying to do with Android 3.0). Whitmore’s prediction for the entire tablet market is kept below a previous industry consensus due to “concerns that non-iPad tablets will underwhelm.”
In other words, DB thinks the iPad is squashing PC sales, and that its competitors won’t compensate for lost laptop sales with equal (or better) successes in selling tablets. As a consequence DB upped its estimate for iPad stock to $450, and dropped its estimate target for Dell to $18 and HP to $40. The move to downgrade Dell seems particularly timely, as since this early news hit it’s emerged that Dell’s 10-inch business-centered Windows 7 tablet–a potential iPad challenger that could sell well in the enterprise market, given Dell’s heritage–probably won’t arrive on sale until the fall, a move from earlier leaked plans for a summer launch date.
Meanwhile Apple may be carving out a little niche of its own in the portable PC market with a “stealthy” success of the new solid-state MacBook Airs. A different analyst’s dataset suggests the Air is quickly moving into a mainstream product status (unusual for Apple computers) and may even turn into a $2 billion industry all by itself in 2011. The Air seems to have accounted for around 15% of the total notebook sales for the last quarter of 2010–meaning Apple is snagging bigger chunks than ever from the portable PC game while it simultaneously maintains mastery over the tablet PC paradigm that may one day supplant the laptop market entirely.