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Lasting Impact from PC Market Transition to Tablets

The missed opportunities for incumbent traditional PC manufacturers, such as HP and Dell, to participate in the media tablet phenomenon has already raised doubts about their future growth potential. Moreover, the current slow adoption of Ultrabooks may erode the influence of legacy PC component providers, such as Intel.

Clearly, the future belongs to those agile industry leaders who saw this demand shift coming and invested wisely in new product development. Strategic foresight will separate the winners from the losers, as this PC market transition plays out in the coming weeks and months.

​The April to June quarter of 2012 set a new record for media tablet shipments reaching nearly 25 million units -- with total shipments growing 36 percent quarter-over-quarter (QoQ) and 77 percent year-over-year (YoY).

Apple iPad shipments represented nearly 69 percent of worldwide volumes for the period, according to the latest preliminary global market assessment of vendor share by ABI Research.

Gains in the quarter also came from Samsung (8.1 percent) and ASUS (4.0 percent), while RIM (1.0 percent) experienced the most significant decline. Shipments of Dell and LG ceased in the period, as both companies retrench for possible future tablet offerings.

Worldwide shipments of media tablets are expected to exceed 100 million units in 2012. The market share implications for the PC sector will be a decisive factor in predicting the likely outcome and lasting impact on key industry players.

"Most impressive about Apple's 17.0 million tablet shipments in the second quarter of 2012 was it nearly matched 2010 total worldwide shipments of 17.3 million for all vendors," says Jeff Orr, senior practice director for mobile devices at ABI Research.

Apple reported that nearly 1 million of its iPad 2 devices were shipped to U.S. education customers during the period, which contributed to their growth -- but also to its continuing average selling price (ASP) decline. ABI estimates a 4 percent drop in ASP for the company QoQ and nearly 19 percent YoY.

Despite shipment restrictions imposed on Samsung, they maintained their second-place share for the second quarter of 2012, followed by Amazon and ASUS. New vendors and products are entering the fray during the second half of the year, including tablets from Google and Microsoft.

ABI Research expects the new products to impact share -- both positively from Google Nexus 7 tablets and negatively from Microsoft Surface tablets -- of the Google Android OS used on most media tablet models. The tablet market is apparently on track for an amazing 102 to 110 million device shipments worldwide for full-year 2012.

Generally thought of as mobile computing devices, the majority of media tables only contain Wi-Fi broadband access, which restricts the device use to wireless-equipped homes, businesses, and public hotspots. But that hasn't negatively impacted tablet demand -- omitting cellular modems has actually positively reduced device costs.

In fact, during the second quarter of 2012, less than 27 percent of new media tablet shipments included a mobile broadband (3G/4G) wireless modem module -- that's down by a significant 12 percent year-over-year.

When this trend has run its course, the ultimate impact -- both positive and negative -- on the major players in the PC manufacturing and wireless networking sectors will likely be dramatic.

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