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March 27, 2014

Will traditional PC vendors like HP and Dell be squeezed out of the consumer market?

Tablets shipments are expected to outpace PCs by 2015, says Gartner.

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Traditional PC vendors like HP, Dell and Acer are likely to be squeezed out of the consumer market as bigger players like Apple and Samsung look to evolve their ecosystem across multiple devices, a leading analyst has suggested.

Gartner predicted worldwide shipments of PCs, tablets, ultramobiles and mobile phones would jump 6.9% to 2.5 billion units in 2014 from last year.

Mobile phones are expected to account for 1.9 billion of sales, a 4.9% increase from 2013, while the tablet share of the market will rise 38.6% to 271 million units.

But the number of PCs is expected to decline 6.6% to 276.7 million units, driven by users choosing to replace traditional desktops and notebooks with tablets

Ranjit Atwal, a research director of PCs and ultrabooks at Gartner, told CBR: "PC and traditional hardware vendors, they will just find it difficult…HP, Dell, Acer, are doing well through the backend but how are they doing on the front end? If they want to survive, they will have to go into it ultimately.

"Consumers aren’t dependent on one device, but have multiple devices. They need to play in all of those segments, providing that seamless content at the frontend."

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He added: "They talk about tablets, hybrids and other services on a consumer level, none of them are letting go of the consumer side because they know the importance of moving forward or having that consumer visibility.

"Yet, they still need to build that consumer awareness across all those devices and it’s not just PCs, but phones and tablets, which they don’t have a significant position in."

Gartner added that although the device market is set to grow, commoditisation will kick in, putting pressure on prices.

The report said: "As the overall device market starts to saturate, the increasing pressure on margins will continue, and vendors will look at different ways to cope with the ongoing issue of lower margins.

"While the trend of declining prices is inevitable, consumers increasingly value other features in a device – beyond just the price. For example, new tablet users look for smaller screens and greater portability, while current tablet users look for better connectivity in their tablet replacements."

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