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Demand for Media Tablets Disrupts the PC Market

Worldwide personal computer (PC) shipments increased by 3.6 percent in the third quarter of 2011 (3Q11) compared to the same quarter in 2010, according to the latest market study by International Data Corporation (IDC).

The results are up slightly from the 2.7 percenet growth experienced in 2Q11, and just below IDC's August projections for 4.5 percent growth in the quarter.

The Americas and EMEA were slightly below expectations while the Asia-Pacific markets were slightly ahead. The market continues to struggle as consumer discretionary income is diverted to other areas and business spending remains depressed in light of other priorities and a potential double-dip recession.

"For the moment, PCs have taken a backseat to a range of other devices competing for shrinking consumer and business budgets," said Jay Chou, senior research analyst at IDC.

While growth is expected to stay in mid-single digits in the fourth quarter, IDC expects to see faster growth in 2012 and beyond -- based on easier comparisons and refreshed PC offerings, as the industry better addresses the evolving usage models by integrating more of the features in ultra mobile devices (UMD).

Most vendors continue to struggle with the slow market environment and product changes. Although media tablets and other devices won't likely replace PCs, questions on how products will evolve, and consumer interest in these and other emerging categories are providing a distraction.

And while price remains critical, many users are delaying PC purchases for the moment. Still, there are opportunities, as demonstrated by Lenovo's gains, and IDC expect PCs to find stronger demand in the coming years.

"The U.S. market came in about flat as expected, but failed to generate positive momentum given the state of saturation and lack of incentives for consumers to upgrade. Other inhibitors included the poor economic environment and, to a certain extent, Apple iPad cannibalization," said David Daoud, IDC's Personal Computing Research Director.

As we approach the holiday season, the opportunity for low single-digit growth is real, but mostly as a result of poor market conditions last year, as opposed to a recovery in demand. IDC's Worldwide Quarterly PC Tracker gathers PC market data in over 80 countries by vendor, form factor, brand, processor brand and speed, sales channel and user segment.

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