Tablets Will Hurt PC Sales More Than Expected, Study Says

CYBERSPACE — Tablet computers will hurt PC sales at a much faster rate that expected according to a recent research study from Goldman Sachs.

The report said this could be particularly damaging to heavyweights like Microsoft and Intel if they don’t get on the tablet bandwagon.

Analysts at the investment bank said they expect tablet sales to eat into PC sales at a rate of 33-35 percent, slowing PC growth to only eight percent – well below market expectations.

The Goldman findings said that Microsoft and its partners have not responded to the success of tablets from Apple, Google and their partners.

"What is surprising is that many of these products are not utilizing Intel microprocessors or a Microsoft operating environment," said Goldman Sachs analyst Bill Shope.

Shope said he expects that 54.7 million tablets will be shipped in 2011, an increase of more than 500 percent over 2010. "The fast rise in tablets could have significant implications across the technology industry as a whole," said Shope. He added that if iPad estimates are included, Apple's share of the consumer computer market is approaching 12 percent.

Another Goldman analyst, Sarah Friar, said that a tablet response is still not forthcoming from Microsoft. The report pointed to Microsoft CEO Steve Ballmer who failed to deliver on a promise to release a Windows 7-based tablet by Christmas.

According to the report, Microsoft is however planning to release tablets that run Intel's Oak Trail processor for mobile devices in early 2011. But Goldman feels it may be too late and downgraded Microsoft's stock rating from “buy” to “neutral” in October.

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