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As iPad Continues To Flourish, PC Accelerates Its March Towards Death

The PC industry’s future appears to be even gloomier than previously thought. And it isn't doing anything to reverse, or adapt, to the trend.

As smartphone and tablet adoption continue to skyrocket, people are turning away from their PCs in droves and failing to replace their old personal computers as frequently as previously.

In fact, the PC industry’s future appears to be even gloomier than previously thought, according to Barclays Capital's hardware analyst Ben Reitzes.

While tablets and smartphones have become ubiquitous and are replacing PCs as a preferred computer for a new generation of users, confusion over Microsoft’s recently released Windows 8 is also harming the PC industry’s prospects.

"We are lowering our 2012-2016 PC forecasts due to weak macro conditions, confusion around Windows 8, ongoing cannibalization from tablets, and an elongation in replacement cycles," Reitzes wrote in a research note.

Market researchers' data recently showed that the PC sector slumped in the third quarter, with shipments falling more than 8 percent from the prior year.

Intriguingly, most PC industry players are doing pretty much nothing to reverse the trend.

“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,” Reitzes said, according to the report seen by Barron's. “After years of denial, most PC industry players still don’t seem to realize what is happening — and don’t have contingency plans.”

Reitzes figures that in a few years, the PC replacement cycle will be a year or two longer than it is now, resulting in a slump in shipments — a loss of 50 million to 100 million units in annualized demand by 2015, which currently stands at 350 million units per year.

Tablet makers on the other hand, will soar to even headier heights on the shoulders of the PC industry’s decline. Reitzes expects 182 million tablets to be sold in 2013 — up from his prior estimate of 146 million. By 2016, he predicts that number will hit 300 million.

Despite growing competition in the tablet industry, the big winner in all this will be Apple, Reitzes predicts. He expects the iPad to continue to account for the majority of tablet sales in the next few years: 61 percent in 2013 and 2014, and 59 percent in 2016.

“Even with near-term margin pressures, Apple should still generate a disproportionate share of profit in computing over the long-term,” he said.

Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio

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