As tablet market set to boom, PC and hard drive sales stalling

Christine Dobby | Nov 6, 2012 11:36 AM ET | Last Updated: Nov 6, 2012 11:53 AM ET

AP Photo/Lee Jin-manA Samsung Electronics Co. smart PC and tablet, powered by a new version of Microsoft's Windows operating system, shown at a media briefing in Seoul, South Korea, in October.

• The fourth quarter is shaping up to be a blockbuster one for tablet sales, but amid demand for a flurry of new hand-held devices, momentum for PC sales looks to be stalled.

In a note Tuesday, JPMorgan’s global technology analysts published their forecasts for the tablet, PC and hard disk drive (HDD) markets.

“In what is becoming a series of mixed forecast updates, we are again raising our tablet forecast, while lowering our growth forecasts for the PC and HDD markets,” the analysts wrote, adding that since June, they have been “increasingly cautious” about the prospects for sales of PCs and HDDs (the hardware devices used to store information on computers).

“Part of the cautiousness stems from our view that smartphones and tablets stand to grab increasing share of the IT wallet,” they said.

The analysts forecast total tablet shipments of 46 million in the fourth quarter of 2012, which would bring the total sales for the year to 119 million.

If that comes to pass, that would be year-over-year growth of 58% for the quarter and 68% for the year.

That growth comes as more and more options hit the market, including Apple Inc.’s new iPad Mini, as well as offerings from Amazon.com, Google Inc. and Microsoft Corp.

Meanwhile, the JPMorgan analysts forecast worldwide PC shipments for the quarter would come in at 90 million, a dip of 5% from the same quarter last year.

For the whole year, estimated PC sales of 353 million would be down 3.3% from 2011.

Looking forward, demand for PCs from China “remains sluggish with limited near-term catalysts.”

“While the macroeconomic blues are not likely to dissipate in the near term, we are concerned that the bevy of new tablet offerings this holiday season could further crowd out PCs in an already challenging IT spending environment for both enterprise and consumers,” the analysts said.

Finally, they predicted total year sales of 586 million hard disk drives, a drop of 6% on a year-over-year basis.

“We think that there could be a slightly better near-term growth [versus PC sales] as original equipment manufacturers and channel partners potentially build for a Windows 8-related demand boost, but after that we think that any benefit is likely to fade.”

One investing recommendation with respect to U.S. IT hardware stocks: “Stick with Apple, as PC and HDD growth prospects remain challenged,” the analysts said.