There is a fundamental change taking place in the computer industry. Consumers are buying tablets and utilizing smart phones for computing and getting online instead of desktop PCs and even laptops. Tablets and smart phones are lightweight touchscreen computers. Most people use tablets to play music, watch movies, send e-mails, check the weather, and surf the Internet.
HP is a major seller of laptops. In fact, it’s the company’s largest segment. To make matters worse, HP is releasing its own tablet this summer. The company is about to cut into their own sales in the PC segment.
According to Goldman Sachs, tablets will replace one in every three PCs in 2011. That forecast was made in December 2010. Back then, Goldman predicted Apple would sell only 37 million iPad tablets in 2011. Today, those estimates are greater than 55 million amounting to 50% higher than the original forecast.
This massive growth in tablets has forced other large tech companies to change their business models. For example, Microsoft CEO Steve Ballmer recently said the company’s main focus is bringing a tablet to the market.
Semiconductor giant Intel said it will increase capital spending in 2011 to $9 billion. To put that in perspective, that’s a 75% increase from 2010. Intel is focusing on smaller technologies for use in smaller footprint computing such as on the tablet market.