Report: PC Replacement Drops as Tablet Use Grows

LOS ANGELES — A new report from Barclays Capital points the way to the desktop computers demise, which it notes will be a long, slow slide, rather than a screeching halt.

The rapid advance of mobile computing technology such as Smartphones and tablets, and the applications they enable, is causing consumers to prolong their PC purchase decisions — holding on to legacy hardware as they spend more time using their new devices — driving a trend that analysts predict will continue into the future.

“We believe a new generation of consumers and IT workers are figuring out how to compute differently than those that started using PCs in the 90’s — relying more on mobile devices and the cloud — as PCs see significant ‘task infringement’ by the day,” explains Barclays’ Ben Reitzes. “As a result … the PC replacement cycle is in the process of being elongated by 1-2 years.”

This means that folks are holding on to their old computers longer, preventing them from enjoying all of the latest features and services being offered by cutting edge adult companies — unless it is viewed on a tablet.

“After years of denial, most PC industry players still don’t seem to realize what is happening — and don’t have contingency plans,” Reitzes added. “PC’s are not the only subsector impacted in tech — as printing also is caught in the wake of mobility.”

As a result, Barclays significantly cut its PC industry estimates to reflect deterioration in PC related revenues.

On the bright side, this is very good news for tablet sales, which are expected to reach 300 million units annually by 2016, with the iPad projected to continue its approximately 60 percent market share throughout the period.

“We believe that Apple will continue to gain share and be one of the main beneficiaries of the market move toward mobile devices,” Reitzes states. “Even with near-term margin pressures, Apple should still generate a disproportionate share of profit in computing over the long-term.”

Given these findings, it’s clear to many observers that digital content companies should target iOS and other tablets rather than treat them as a second thought.