HP (NYSE:HPQ) and Dell (NASDAQ:DELL) are the two largest PC vendors in the world with close to 19% and 13% share respectively in the global PC market. Over the past few years, the notebook computer market has witnessed tremendous growth resulting in huge profits for the two tech giants.
However the advent and growing popularity of tablet PC’s, especially Apple’s (NASDAQ:AAPL) iPad, is now posing a serious threat to the conventional notebooks and ultra-small “netbooks”– a mainstay of both HP’s and Dell’s PC business. An important question arising at this point for both these firms, as they make a push into the tablet market, is whether notebooks can hold their own against tablets going forward. Even if they do, it is clear that increasing tablet PC popularity is hampering notebook sales – thereby leading to slower growth in notebook sales in the future, if any.
According to research group Canalys, the notebook PC category will grow by around 8% this year, though “every ten tablets sold will mean five notebooks that don’t.” [1]
Notebook Prices Will Decline Sharply
Companies like HP and Dell are coming up with cheap computers and developing new models in an attempt to make notebooks a more viable option for consumers. Unfortunately, estimates are that the growth in notebooks sales will tail off quickly after 2011. As such, notebook prices could take a dive going forward. [1]
See our full analysis and $55.49 price estimate for HP
Notes:- Dell, HP Bank on Notebooks Coexisting With iPad, investorplace.com [↩] [↩]
