The iPad is wreaking havoc on the personal-computer market.
Hewlett-Packard?s consumer PC sales plunged 23 percent last quarter, and the company lopped $1 billion off its annual sales forecast. And while rival Dell beat analysts' estimates because of corporate demand, its sales to consumers slumped 7.5 percent. More than 70 million tablets like the Apple iPad will be sold in 2011, a total that will balloon to 246 million in three years, Jefferies & Co. said.
?You're walking into a buzz saw,? Jane Snorek, a senior research analyst at Nuveen Asset Management in Milwaukee, said of the iPad. ?The tablet is going to replace at least the home computer.?
At 7.3-inches across with a color screen and an array of popular downloadable games like ?Angry Birds,? applications for watching movies and reading magazines, and software for word processing and spreadsheets, the iPad has siphoned off more PC sales than analysts and executives predicted.
Apple sold 4.69 million iPads last quarter, for a total of about 20 million since the April 2010 debut.
The PC market, by contrast, declined last quarter. Global shipments fell 3.2 percent, hurt in part because some consumers bought tablets instead, research firm IDC reported last month.
While rivals including Research In Motion, Motorola Mobility Holdings and Samsung Electronics have begun selling tablets, the devices have yet to gain wide traction.
The lack of viable competitors was felt across the PC industry in the first quarter. Microsoft Windows sales fell 4.4 percent to $4.45 billion. Its net income of $5.23 billion was eclipsed by the $5.99 billion reported by Apple, which topped its rival in that measure for the first time in 20 years.
At Intel, whose processors run more than 80 percent of the world's personal computers, growth in the PC-chip division came mainly from emerging markets and corporate sales. Hewlett-Packard, the top PC maker, Tuesday cleaved 20 cents a share from its annual earnings per share forecast, to $5, excluding items.
Microsoft plans to release version of Windows optimized for touch-screen tablets next year.
Companies that aren't selling tablets risk getting left behind, said Tony Ursillo, an analyst at Loomis Sayles & Co.
?Most of the growth is going to come on the tablet side,? he said.
With assistance by Ian King in San Francisco.
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