March 30, 2011 12:47 pm

Tablets to boost IT market despite earthquake

A surge in demand for tablet devices such as Apple’s iPad is expected to help boost overall IT spending this year and offset any negative impact on the supply chain from this month’s devastating earthquake in Japan.

New figures from Gartner, the research firm, predicted that global spending on IT would rise 5.6 per cent to $3,600bn in 2011. The forecast, which was revised up from an initial forecast of a 5.1 per cent increase, includes spending on computing hardware by consumers and companies, as well as enterprise software, IT services and telecom equipment.

Richard Gordon, research vice-president at Gartner, said that while the full impact of the earthquake and tsunami in Japan on the supply chain was still playing out, the effect on overall IT spending “doesn’t appear to be catastrophic”.

There had been concern that the supply of certain materials such as silicon wafers and plastic packaging for chips would affect consumer electronics manufacturing. Some of those fears appear to be receding as companies get back on line or alternative suppliers are found.

Mr Gordon said that large manufacturers such as Apple and Hewlett-Packard “were not screaming about components” at the moment and that initial indications were that there was some slack and flexibility in the supply chain, as existing inventory acted as a buffer. However, he anticipated that there could be some spot shortages in April and May.

“We are not out of the woods yet, but at the moment we don’t see the need to change our forecast,” he said.

As well as being a major supplier of parts, about 9 per cent of the global IT spend comes from Japan. Mr Gordon said he expected that there would be a slowdown in spending in Japan in the second and third quarter with a pick-up towards the end of the year.

He said that the impact of unrest in the Middle East would have only a limited impact on global IT spending. The region only accounts for 2 per cent of spending.

For the first time, Gartner included forecast sales of tablets in the same category as PCs and servers. Apple’s launch of the iPad last year triggered a surge in demand for tablet computers, prompting rivals such as South Korea’s Samsung to rush to the market with their own versions.

However, there have been growing concerns that the popularity of the tablet, a slimmed down and more portable computer format, as well as internet-enabled smartphones such as Apple’s iPhone would cannibalise sales of personal computers and laptops.

This month, Gartner lowered its PC shipment forecast for 2011 by 5 per cent to 387.8m units on the back of weaker demand from China and competition from other mobile devices.

Mr Richard Gordon said that without media tablets in computing, forecast for spending in that category would have been down.

Spending on tablets is expected to hit $29.4bn this year, compared with $9.6bn last year. By 2015, Gartner predicts that tablets could generate sales of $80bn, equating to a fifth of the overall global computing market.

Acer, which is jostling with Dell for the number two slot by sales in the global computing market, last week said that its PC sales for the first quarter would be lower than expected. The Taiwanese company was slower than its competitors to react to the shift in consumer tastes towards tablets.

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