Rebirth of the desktop

Powerful notebooks have not dented sales of the desktop PC. It has been reborn as a low-cost solution for the office and as a multimedia entertainment hub for homes.

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By  Diana Milne Published  November 6, 2005

|~|BWO_004Cbody.jpg|~|Desktop PC shipments have experienced double-digit growth globally despite fierce competition from powerful and sleeker notebook PCs.|~|Mobility is the buzz word on PC vendors’ lips as notebook PCs grow in sophistication and popularity. Everybody seems to want to own a laptop and the sight of users checking their e-mails or watching a movie on the move is becoming commonplace. Yet sales figures reveal that despite the popularity of the notebook PC, the desktop PC market is still experiencing double-digit growth. The second quarter of 2005 saw a growth of 23.5% in desktop sales in the PC markets of the Middle East and Africa (MEA). And globally there is an expected unit growth for desktops in 2005 of 10.2%. Enterprise customers are the biggest buyers of desktop PCs. Acer, for example, sells 70% of its desktops to corporate customers and just 30% to consumers. The company says it is not unusual for it to receive a tender for 5000 desktops and just 1000 notebooks. A major reason for enterprise customers’ continuing investment in desktop PCs is cost. Desktop PCs remain far cheaper than notebook PCs. The average entry-level business notebook PC costs around US$1000 and the average price for a desktop currently stands at less than US$700. Furthermore, the process of migrating data from desktops to notebook PCs is costly and time consuming. Naturally notebo-oks are purchased for workers on the move — but a large proportion of the workforce remains desk-bound. And firms are understandably reluctant to buy expensive mobile technology for these workers. “Commercial sectors still drive the demand towards desktop PCs,” says Nimer Al Attal, managing director of DTK Computers. “We believe certain departments in any organisation cannot move away from using desktop PCs and continue to replace their existing installation with the latest technology,” he adds. Dania El-Kadi, marketing and communications manager at Intel Middle East, concurs: “Enterprises have certainly realised the benefits and flexibility of mobile computing but desktops are still the first choice for desk-based jobs.” “They are only investing in notebooks for managers and sales staff who are on the move,” she continues. Naturally certain industries invest more money in desktops than others. In the banking sector, for instance, desktops are still the first choice. But in the oil industry where employees travel frequently and in insurance where sales staff work on the move more notebooks are being purchased. Sameh El Deeb, category manager of the business PC division at HP, says: “There will always be a market for desktops in certain sectors of the commercial space.” “Particularly within oil and gas, banking and the telecoms sector, network service pro-viders and ministries of education,” he continues. Another factor preventing widespread employment of notebooks in the office is security. Laptops can be easily lost or damaged and when an employee takes a laptop home they could also be taking home confidential company information, which would be of great value to their competitors. “Corporate organisations don’t always like the mobility that notebooks offer,” claims Sanjay Kachroo, business development manager of business PCs at Acer. “Particularly because they take company information out of the office environment. ”This can be very open to abuse. Laptops can also be mishandled and if you damage a laptop it will cost you dearly,” he states. This, and the relatively cheap cost of desktops, means that they are still a far more accessible option for many users in the region, especially in countries starting out on the road to creating a work force educated in IT . In Egypt, Qatar, Bahrain and Lebanon far more desktops are sold than in Saudi Arabia and the UAE — where there is a 50-50 split between desktop and notebook PC sales. Governments are aware of these trends and a number of state-run schemes have been set up to increase PC penetration in less mature IT markets. Egypt has two such schemes — the PC for Every Home and the PC for Every Student. The programmes aim to reach one PC for every three families and to provide end users with PCs that they can actually afford. By 2007 the Egyptian government hopes to provide 14 million users with four million PCs. In a similar vein, this year HP signed a five-year deal to supply up to 10,000 PCs a year to the Saudi government for the next five years. As part of the deal HP will be able to open a local assembly plant in the country. El Deeb believes it is too early to judge what long-term impact HP’s project with the Saudi government has had but beli-eves that in the long run it will influence people’s choice of PC in the future. “Certainly it will have an influence if this type of product is going to be a success in the region,” he says. “The project is in its very early stages so it is too early to judge whether it will be a success ora failure. But in the medium-to-long term it will be a very good catalyst to sustain desktops and sustain growth,” he states. Its a belief shared by DTK’s Al-Attal, who says: “Several local governments and private financial programmes are underway to address this big chunk of home users.” “Demand for low-cost systems in this region is strong. Most of the first time buyers of PCs — and there are a lot in this region — go for desktops,” he adds. Al-Attal believes that demand for low-cost desktops from first-time buyers will generate double digit growth in the market. ”Some claim there are only six million members of the population that own a PC out of the 300 million Arab population — which is a very low penetration number,” he reveals. ||**||Education boom|~|Dania31body.jpg|~|Desktops are still the first choice for desk-based jobs, says Dania El-Kadi of Intel Middle East.|~|But governments have not just been been investing in desktops for people’s homes. The education sector is fast becoming a massive growth area for IT in the Middle East as governments push for school curricula to be studied online and to ensure that the next generation will be sufficiently tech savvy. In a recent IDC report it has been identified as the most dynamic sector for desktop sales in the region. “Due to desktop rollouts to schools and colleges across the Gulf and special purchasing options for students, the education sector was the most dynamic last year with shipments to the vertical more than doubling compared to 2003,” the report reveals. “States in the Gulf are using the boom in oil revenue to really invest in education. This includes renovating schools as well as supplying them with state-of-the-art IT to help improve the overall quality of education,” it goes on to claim. Higher education establishments and private schools can afford to opt for notebook PCs — last month Fujitsu Siemens Computers sealed a seven-figure deal to supply the Higher Colleges of Technology’s Abu Dhabi Men’s College with 648 Life book T410 convertible laptops — but education ministries that function on tight budgets are opting for the cheaper option and investing in desktops. El Deeb agrees: “Education ministries are trying to equip as many schools and labs as possible with IT but on limited budgets.” “So although private schools and higher education institutes may purchase laptops for their students, state-run schools continue to buy desktops,”he adds. As well as cost factors education ministries have to consider the robustness of the machines they are giving out to children — and the difficulty of managing large stocks of PCs. Given that desktop are more rugged and relatively cheap to replace they are the sensible choice for education ministries. ||**||High tech specs and desktop futures|~|Samehbody.jpg|~|Sameh El Deeb of HP believes the importance of form factors is a global trend.|~|Anyone who visited this year’s Gitex trade show will have been dazzled by the array of high-tech home entertainment PCs on display. Convergence — the coming together of a PC with the various entertainment devices in a person’s home — is all the rage. Once upon a time a home PC was something you used for work, letter writing or playing games. But the move is towards home PCs as all-singing, all- dancing entertainment systems for listening to music, watching movies and downloading material from the internet. And while this has been possible for some time convergence now allows users to access the content they have on different electrical devices in their home through the PC then distributing them through the home through a wireless network. The latest home PCs being launched into the market now take on a range of functions previously carried out by separate electrical devices — such as the ability to play music, watch television and listen to radio. Intel hopes its new Viiv technology processors will help PCs to become synonymous with entertainment computing. The PCs based on Viiv technologies will be controlled via remote control and will include a dual-core processor, chipset, platform software and wired networking capabilities. They contain software that allows users to interact with their PC in the same way as they would with a television and to access content anywhere in their home on a number of different devices. Meanwhile, Acer’s MG3001 Media Gateway is an interface that links together all consumer electronic equipment — PCs, music centres, MP3 players, digital cameras, games consoles and wireless devices. The evolution of convergence and the digital home makes home PCs very appealing to consumers and has helped to sustain healthy growth in the desktop market. A recent IDC report for Q3 2005 notes: “Notebooks continue to drive overall growth across the region. But desktop sales maintained growth at over 11%.” “Demand for digital entertainment systems coupled with attractive bundles continued to stimulate consumer desktop purchases,” it continues. David Drummond, business manager of LCD TV at Acer told IT Weekly earlier this year about the appeal of convergence to consumers and the part PCs can play in this. “We’re at a phase of convergence where we are seeing consumer electronics and personal computing coming together in the home,” he claimed. ”A merger of the two worlds is coming, driven by the availability of digital content on the web, which is now competing with traditional consumer electronic forms like DVD, satellite TV and audio CD,” he continued. Aside from mobility people buy notebook PCs because they are small and take up little space on a desk in an office or on the kitchen table at home. But desktop manufacturers have caught onto this trend and have reduced the size of their products to suit the size requirements of home and corporate customers. Gone are the days of the bulky grey box and large unwieldy monitor. Desktop PCs and monitors have followed the example of mobile phones, laptops and television sets by becoming thinner, lighter and far sleeker in design. IBM’s ThinkVantage technologies are a good example of this. In February the firm launched a 19-inch ThinkVision monitor designed for desktop PC use. Lenovo — which has taken over IBM’s PC division — has recently announced the launch of the ThinkCentre E Series, which will be available either as a tower or as a small desktop, which is around half as thick. Similarly, Intel’s Viiv-based systems for home PCs are available in a variety of different form factors, including small, sleek consumer electronic-type designs. The evolution of small form factor desktop PCs has helped to ensure their survival in the office environment where space is often at a premium. “Form factors are especially important in industries such as banking where space is limited,” says Mohammed Sharaf, Lenovo’s marketing manager for the MEA. “But at the same time companies are looking for security and small form factor PCs have helped to solve both problems for them. Now they have security as well as a small-sized machine,” he adds. El Deeb agrees: “The importance of form factors is a global trend. It is one of the features that manufacturers are looking at more closely and it is something they must take into consideration if they want their desktops to keep selling.” It is a point which is of paramount importance to Chris Saul, desktop architect, Sun Microsystems, Southeastern EMEA. He affirms: “SunRays are considerably smaller than a traditional PC and monitor — they also require less power to operate — giving you better use of your office space.” Intel has developed and launched new components based on BTX (Balanced Technology Extended), which it hopes will make the small form factor desktop PC more accessible to the mass market. BTX enables platforms to run more quietly, has unique scalable system form factors and is cheaper than other small form factor PC technology. This could be an important step forward for desktops and could ensure their survival in office environments. Notebooks will continue to be purchased for those who require connectivity on the move. But as long as prices stay low desktop PCs will remain the first choice for the education sector, governments and corporate customers where mobility is not an issue. And consumers looking for a home PC to be the hub of their multimedia entertainment centre will opt for the desktop. With vendors displaying their confidence in the market by continuing to roll out increasingly powerful and sophisticated desktop products, the desktop PC, far from becoming obsolete, has now got a new lease of life. ||**||

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