Is the PC’s demise nearing?

The “post-PC age” talk has accelerated in recent weeks following gloomy PC shipment forecasts from both IDC and Gartner. What’s really behind the steep drop in the PC business?

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Is the PC’s demise nearing? Pundits say although all-in-one desktops have been growing, they haven’t had a huge impact on the rapid growth of tablets.
By  Manda Banda Published  May 20, 2013

The “post-PC age” talk has accelerated in recent weeks following gloomy PC shipment forecasts from both IDC and Gartner. What’s really behind the steep drop in the PC business?

No matter where you go or whose numbers you look at, almost every PC vendor, analyst and market research firm is delivering the same metrics – tablet and smartphone figures are growing rapidly. IDC reported last month that tablets shipments will surpass desktops this year, and they will outpace notebooks next year.

Whether or not these mobile devices are replacing desktops and notebooks or merely delaying PC purchases is beside the point. What is clear in the Middle East and elsewhere around the globe is that tablets and smartphones are in demand, and new PCs are not. But why is this happening? What’s behind the sharp dip in the PC business?

Well, there are not straight forward answers, but the launch of Windows 8 has disappointed and hasn’t sparked the sort of PC refresh cycles that have followed a new OS release.

In fact, much of the blame for the slow PC sales has been directed at Microsoft, as IDC stated: Windows 8 has so far failed to provide an increase in PC sales. Windows 8 has its issues, sure; Microsoft’s latest OS has been criticised for removing the Start button and its unfamiliar new user interface. But it’s not just Windows 8’s uninspiring release – Microsoft may be a victim of its own past success.

Windows 7, which was released to positive sales and reviews, isn’t even four years old. Windows XP, meanwhile, was released more than a decade ago, and yet NetMarketShare estimates that 38% of the installed PC base globally is still on XP. The point is, customers running previous versions of Windows are satisfied enough and don’t feel the need to upgrade. This, coupled with a longer PC lifecycle has added to the woes the PC sector is experiencing.

That said, I do believe that PC vendors have for a long time enjoyed the double digit growth in this sector and in the process stagnated on the innovation part.
Although vendors in the PC space, from Lenovo to Intel, have bemoaned the lack of innovation around the PC, last year many tried to infuse the market with slimmer, sexier form factors, from Ultrabooks to sleek all-in-one (AIO) desktops.

But, the results have been a bit mixed so far with no huge impact on the rapid growth that the tablets and smartphone continues to see. While AIO systems have been growing, Ultrabooks have been slower to take off despite the considerable marketing effort around the ultra-thin notebook category. Intel is hoping to remedy this by lowering the price of Ultrabooks while also bringing new features like voice and facial recognition technology to new models later this year. But will it help?

It remains to be seen but like Microsoft being a victim of its own success, so too have PC vendors and system builders. Over the years, the PC market has seen the quality of products improve. Today, systems are simply more solid and robust and can run longer than the 3-to-4 year lifecycle. At the same time, components are better and faster, not to mention cheaper, and therefore modern PCs can run effectively for longer stretches further delaying PC refresh cycles.

Another reason in my view that is pushing the PC refresh cycles back is software. In years gone by, new, powerful apps used to put pressure on hardware vendors to keep pace and release faster components to run that software. But, that’s no longer the case nowadays. Most apps in the market today aren’t pushing the hardware advancements as much as they used to, so there don’t have the huge leaps between systems like was the case a few years ago.

That may be the prevailing scenario but I also want to sum up by highlighting the two biggest problems for the PC market at present and these are: Windows 8, which has been poorly received and isn’t creating demand, and the longer refresh cycles for PCs.
I would like to hear your views on this topic for a feature am working on next month. I can be reached at manda.banda@itp.com

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