May 30, 2011 7:53 pm

PC makers step up efforts to combat iPad

The fightback by PC makers against Apple’s iPad intensifies this week as new products and prototypes go on show at Computex, the world’s second-biggest consumer electronics trade fair, which opens on Tuesday in Taipei.

PC makers have seen sales fall in the past year as consumers have flocked to the iPad. Now, more than a year after the iPad’s launch, they hope to hit back with their own tablet models and notebooks and netbooks.

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HP, Acer, Asus and Lenovo are among PC makers expected to unveil new tablet and notebook PC models at Computex.

Chipmakers such as Intel, Nvidia, AMD and Arm will reveal plans for chips that would allow for more powerful and less battery-intensive mobile devices.

These products represent a two-pronged strategy by PC makers: on the one hand, a big push to revive consumer excitement in laptops, and, on the other, to compete head-on with Apple’s iPad 2 tablet with either cheaper or more creatively designed versions of their own.

Another focus of the show is likely to be PC makers’ plans for notebooks or tablets based on Chrome, Google’s operating system that was previewed by the internet company in May.

A number of hardware makers have already started selling their tablets, such as Acer’s Iconia, the Eee Pad Transformer by Asus, and Motorola’s Xoom.

However, while some models, such as that of Asus, have been selling well in the US, total sales volumes of these rival tablets are still far behind those of the iPad. None have captured consumers’ imaginations in the same way.

This has been partly due to supply constraints for high-end touch screens as a result of the disruption caused by the Japan earthquake.

Lenovo, which launched its LePad in China in late March, said on Thursday it was facing a supply shortage. The LePad, which will launch in the US in July, is being manufactured by Compal and Wistron of Taiwan.

Whatever the sales figures for tablets – and estimates vary wildly – reviving consumer interest in notebook PCs is also becoming increasingly urgent.

Research firms are providing hard evidence that consumers are showing less commitment towards forms of computing other than tablets.

Global desktop and notebook PC sales declined slightly in the first quarter to 81.3m units down from 81.6m a year earlier, according to a report by the IHS iSuppli research firm last week.

However, Acer, the number three PC maker and one that relies more than others on netbooks, saw its shipments fall by 20 per cent year-on-year as that category’s appeal faded in the face of competition from tablets.

“IHS believes that the jury is still out on exactly how much tablets are cannibalising PC sales,” Matthew Wilkins, principal analyst for compute platforms research at IHS said.

“However, the rising number of tablet models on the market, along with certain high-profile product launches during the first quarter, caused confusion among consumers as to exactly how to view the tablet platform relative to the PC platform,” he added.

IHS iSuppli predicts shipments of traditional PC-style tablets will be outstripped 10 to one by media tablets such as the iPad over the next five years with 889m of such tablets shipped by 2015 compared with 89m PC tablets.

However, it thinks PC makers could benefit from new hybrid formats, such as where tablets can be docked with keyboards and turned into laptops.

Asus, which has enjoyed success with its Eee Pad Transformer tablet, on Monday unveiled the Padfone, a design for a smartphone that could be fitted into a tablet. It also said its next Eee PC netbook, which would run on the Meego operating system or on Windows, would be sold at $199.

Intel sees notebook PCs being completely reinvented over the next two years to fend off the challenge from tablets.

At its analyst day this month, Paul Otellini, chief executive, said notebook PCs would become more mainstream-priced consumer electronics devices. In a description that sounded like Apple’s MacBook Air, he said they would become “ultra-thin, ultra-capable” portable devices with all-day battery life, higher performance than the fastest laptops, instant-on capabilities, touch features and constant internet connectivity.

Intel sees low to mid-teens percentage growth in PC sales continuing over the next several years as they become more affordable in emerging markets. On average, it took 175 weeks of income to buy a notebook computer in China in 1995 but this was down to seven weeks by last year.

Acer likewise sees greater opportunities in notebooks than in tablets. Oliver Ahrens, head of Acer China, said so far demand for its Iconia tablet appeared very strong but it would wait to see if that continued before it made a strong production push.

“We see notebooks as a content creation device and tablets as a content consumption device, so we expect notebooks to remain very strong,” said Mr Ahrens. “In the past, consumers have had to replace their notebook every 18 months because of the processor and software upgrades and I am not clear about how consumers will be convinced to replace their tablets at the same frequency.”

He added that the Android operating system had yet to become more attractive to consumers. “It is not sexy enough,” he said.

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