IC Insights hit the front pages this week with their new report forecasting the continued double digit growth for the PC sector in semi. One important caveat, we're (finally) seeing the widespread categorization of tablet devices as "Tablet Computers."
The PC sector experienced a 19% post-recession rebound in 2010, and this year is forecasted to reach a "13% increase to 402 million systems worldwide in 2011 thanks to the rapid spread of PC sales in developing countries and the consumer market's year-old love affair with new tablet-style touch-screen computers," according to the IC Insights report. The variables cited (developing countries demand for PC and global CE market demand for tablets) are critical to understanding the new demand drivers not only in the PC sector, but for the wider, global semiconductor value chain as we settle into the global post-recession economy. Watch for Smith's upcoming MarketWatch Quarterly out in June, which includes a report on Brazil as a cornerstone market among the emerging economies for semiconductor value chain growth.
Importantly, we need to note the language and device category change in these recent industry forecasts: the new device category title of "Tablet Computer." While this might seem to be an arcane point, it is important that tablets are now a member of the PC sector. In Smith's first quarter 2011 MarketWatch Quarterly here and here, we provided detailed explanations as to why tablets are best understood as the newest member of the PC sector, based on their use as consumer and corporate devices (that is, how tablets are used and their demand trends) as well as based on their bill of materials (BoMs) and components (from pricing to component trending). See also EETimes recent discussion of the 'Tablet Computers' label here.
With tablets now entrenched in the PC sector for industry forecasting, the question of 'cannibalization' is finally able to be laid to rest and better understood as the market resolution of the 'natural competition' between devices. In other words, demand drivers favor tablets' device versatility and increased capability over the paired down features offered by netbooks. The volume numbers underscore the obvious feature and device preferences; the compound annual growth rate (CAGR) for the new tablet subsector is "forecast to climb at a CAGR of 152% in the 2009-2014 period reaching 132m units in the next four years," as summarized here by Electronics Weekly.
The strength of demand for devices with increased capability and versatility goes beyond tablets as is seen by the strong emerging market demand for traditional/standard notebooks: tablets are "forecast to grow more than 190% to 49 million systems in 2011, up from nearly 17 million in 2010," while standard notebooks are forecasted to be up 14% "to 182 million units in 2011" according to the IC Insights report here. Netbooks are the only category to drop, according to the IC Insights report and summary by Electronics Weekly, "netbook shipments are expected to fall by a 17% CAGR to 10m units i[n 2014] [sic] from 26 million units in 2009."
Beyond the numbers, what these forecasts tell us is that demand worldwide is trending to favor more features and more versatility from devices, rather than the pairing down of features to save on price (that is, when price is among the primary factors in purchase decision, there is a strong preference for traditional/standard laptops over netbooks). This demand trend is understood by industry and market analysts to extend beyond the PC sector and also be a growth driver for mobile telecommunications and automotive, as well as other sectors.