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Tue 1 Mar 2011 04:09 PM

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JPMorgan says tablets to grow into $35bn market by 2012

Brokerage expects tablets eating into the share of PCs, and competition to drive down premium prices

JPMorgan says tablets to grow into $35bn market by 2012
TABLET ESTIMATE: JPMorgan Securities expects tablets to evolve into a $35bn market by 2012 (AFP/Getty Images)

JPMorgan
Securities expects tablets to evolve into a $35bn market by 2012,
eating into the share of PCs, and competition to drive down premium
prices.

The brokerage, which nudged up
its forecast for tablet unit shipment and revenue, sees steep adoption
rate and increasing number of available devices driving tablet market
growth.

It sees tablet market
growth spurred by improved operating system platforms and penetration
of enterprise and education customer verticals.

"We
expect tablets to have an increasingly negative impact on PC
shipments," analyst Mark Moskowitz said. "More than 35 percent of
tablets sold in 2012 will be cannibalistic, particularly as relates to
netbooks and notebooks," he said.

JP
Morgan raised its 2011 tablet revenue estimates to $26.1bn from
$24.9bn and 2012 estimates to $35.2bn from $34.1bn.

It
expects 2011 unit shipments of 47.9 million, up from its prior view of
46.1 million.

 For 2012 it sees unit shipments of 79.6 million, up from
its prior view of 78.2 million.

The
brokerage expects the tablet market to get more crowded in the third
and fourth quarters of 2011 and sees premium pricing enjoyed by Apple
Inc's iPad to then diminish.

Separately,
the brokerage cut its rating on Seagate Technology to "underweight"
from "neutral" citing potential market share loss in enterprise drives
in 2011 and 2012.