Tablets Rising, PCs Shrinking

The Gartner Group has revised its estimates of PC shipments downwards for this year and into the future, saying that tablets are increasingly replacing PCs as purchases. They estimate tablets will replace 10% of PC sales by 2014. Other analysts are predicting even bigger growth in tablets; estimates for tablet sales in 2011 now range from 35 million to 70 million, depending on who you listen to. The latter figure includes an estimate that Apple will sell 40 million tablets in 2011. That's a mess of iPads.

What's driving all of this? Several factors. Price, of course, is one of them, though if you want you can certainly get a notebook computer (not even a netbook) for less than an iPad will run you ($499 at minimum). What's interesting is the growth in business users of iPads; just look at Apple's site, where you'll now find a section devoted to iPads in business. That wasn't there when they launched; it was only after business users began grabbing iPads in big numbers that Apple added that. I hear reports of increasing numbers of iPads turning up in meetings, where you need to reference an agenda, perhaps take notes, and maybe look up something on a web site or access a file. These are all things the iPad does very well, being speedy and light weight. No clickety-click either, a plus for meetings. (The big issue my wife identifies is the instant-on capability, where booting up her notebook takes several minutes.)

Around the household, tablets are handy when you feel the urge to hit the Internet, read a book or watch a movie. Or play a game, and that's going to be a bigger and bigger area. The iPad has some pretty good horsepower, though it's lacking in the control interfaces (no joysticks, d-pads or buttons here, except virtual ones). Yet developers are finding their way around those limitations.

Which makes sense, if you look at the size of the market. Anywhere from 20 to 40 million iPads selling next year dwarfs any videogame console (the hottest potential for 2011 is the 3DS, and that would be lucky to hit 10 million). Add in the iPhone/iPod Touch markets (which for most games would be a fairly easy variant) and you have serious potential sales, if you can get around the marketing problem. (Getting all those users to find you is only going to get tougher.)

The flip side of this news is the reduction in new PC sales. Much of that will come in developing countries, where they may shift to tablets or smartphones because they are cheaper than PCs. So it may not be as much of a loss as far as game developers are concerned. Still, it's a fair bet that many of the PC users most likely to buy computer games will also get a tablet, and be spending more time with that. Zynga probably doesn't care so much whether a user plays Farmville on a PC or an iPad, but this may matter to some developers. Particularly if your monetization plans depend on selling a $20 computer game by download rather than a $5 iPad game. Yet another reason the freemium model is gaining ground... it doesn't care what the platform is as long as you can make in-game purchases easily (Google, are you listening?).

It's a brave new future... happening fast.