Chip makers downplay the impact of tablets on PC sales

Tablets aren't PC replacements, but complementary devices, AMD and Intel executives claim

The post-PC era is not yet upon us, executives from Intel and Advanced Micro Devices insisted this week in conference calls to discuss their earnings, where the impact of tablets on their businesses was the big question.

The impact of tablets was felt more on netbook sales, which were below expectations during the second quarter, said Intel CEO Paul Otellini on an earnings conference call. Discretionary spending by consumers was going more toward tablets than netbooks, he said.

AMD officials concurred, saying tablets did not significantly cannibalize PC sales. AMD views tablets as a market opportunity complementary to PCs, said Rick Bergman, senior vice president and general manager of AMD's products group. AMD in June introduced its first tablet chip, and the company in the past was criticized for relying overmuch on the PC market and not quickly recognizing the tablet opportunity.

Gartner and IDC earlier this month reported slow gains in PC sales for the second quarter, partly affected by growing tablet purchases. Worldwide PC shipments totaled 84.4 million units during the second quarter, growing by just 2.6 percent year over year, according to IDC.

The share of netbook sales as part of PC sales during the second quarter was 12 percent, down from 22 percent four quarters ago, said David Daoud, research director of personal computing at IDC. The void left by slumping netbook sales wasn't filled by mainstream PCs, and PC makers are now scaling down netbook activity and investing more in tablets.

The tablet market is ruled by Apple, which sold 9.25 million iPads in the most recent fiscal quarter, an increase of 183 percent from the same quarter last year. Most of the Apple iOS and Android OS tablets today come with ARM processors, which are considered more power-efficient than Intel's and AMD's x86 chips. Intel and AMD are now developing faster and more power-efficient chips that can effectively compete with ARM processors in the tablet market.

Acknowledging the impact of tablets, Intel's Otellini this week scaled down the PC sales forecast for the remainder of the year to 8 percent, down from a double-digit growth rate projected earlier this year.

"Even after I saw the numbers yesterday from Apple, and we get engaged in lots of Windows 8 and Android tablet design activity across the board, I believe this [tablet] category is additive to computing. I don't think it's going to replace any one category," Otellini said.

Many viewed netbooks as a different category, but they are value PCs with concessions on OS, screen size and performance, said Nathan Brookwood, principal analyst at Insight 64.

"Netbooks have never been a separate product category. They were a price point," Brookwood said, adding that tablets were complementary devices to PCs for lack of a keyboard and full productivity applications.

However, Daoud said that tablets nevertheless are having an impact on future PC and OS designs. Tablets thrive on media consumption and application delivery models championed by Apple, and Windows 8 might borrow some iPad features, Daoud said. As a hybrid OS combining PC and tablet capabilities such as touch, Windows 8 could redefine the way devices are built.

"Even the vendors -- as they scale back their netbook activity -- they are obviously contemplating where to go next with the media tablet strategy," Daoud said. "All [device makers] will really need to have a consensus on how to build the next generation of PCs."

Intel is investing in the development of ultrabooks, which the company is promoting as the next generation of PCs. Intel has outlined ultrabooks as thin and light PCs with tablet features such as long battery life and being always connected. The concept has been well-received, and ultrabooks will make up 40 percent of consumer laptop sales next year, Otellini said.

"It's a holistic approach to moving the entire market to a different kind of form factor," Otellini said.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags tabletsAppleintelprocessorshardware systemslaptopsComponentsAdvanced Micro Devices

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments


James Cook University - Master of Data Science Online Course

Learn more >


Sansai 6-Outlet Power Board + 4-Port USB Charging Station

Learn more >



Back To Business Guide

Click for more ›

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?