Tablet PCs Will See Exploding Growth in 2011, Will Cannibalize Netbooks and Notebooks - Prediction

Total Available Market for Slates May Reach 51.3 Million Units in 2011

by Anton Shilov
11/30/2010 | 10:18 PM

DRAMeXchange, the research department of Trendforce Corp., predicted that personal computers in slate form-factor will see maximum year-over-year growth in 2011. By contrast, the growth of other types of PCs will be not only much slower, but will actually be negative for netbooks.


According to DRAMeXchange, the total available market (TAM) for desktops next year will reach 127 million units (up 6.1% annually), the TAM of mobile computers (netbooks and notebooks) will be 222.7 million (up 15.4%) in 2011 and the total available market of netbooks will drop 2% to 32.6 million devices. Comparatively, the TAM of tablet form-factor systems will skyrocket by 237.5% year-over-year and will reach 51.3 million in 2011. In general, there will be 350.2 million personal computers sold next year, an increase of 11.8%.

"PC industry will be influenced by tablet PC and indicate the growing pattern. We expect it will re-shape the industry," said the analysts from DRAMeXchange.

After launch in April, Apple iPad shipment has already reached 7.5 million units by 3Q 2010. Other vendors will also aggressively penetrate this rapidly growing market. 2011 tablet shipment is expected to be 51.3 million units since more hardware and software products will be ready. However, the true competition between Apple iPad and other offerings, which include both Blackberry Playbook as well as various Google Android-based devices will start only by the middle of next year.

DRAMeXchange thinks that up to 20% of slate PCs will actually be bought instead of traditional mobile computers in clamshell form-factors and will thus cannibalize demand for netbooks and notebooks.

"We expect the surging tablet PC will limit the growth in netbook in 2011. However, netbook still has some demand for basic functionality such as office computing," the analyst from the market tracking company believe.

Netbook reached its peak 172% year-over-year growth in 2009 since the initial launch in 2007 with 28.4 million units sold. In 2010 especially for European and the U.S. markets, netbook face the cannibalization from tablet that most OEM and ODM are conservative toward netbook in the second half of 2010. DRAMeXchange estimates 2010 netbook growth to reach 17.2% annually to 33.3 million units and next year that market is projected to shrink by 2% to 32.6 million.

Despite of the continuous trend towards replacement by mobile computers, the 6.1% growth rate of desktop PCs will be maintained in 2011 thanks to emerging markets. As a result, 127 million of desktops will be sold next year.