Sluggish Sales Hint at End of PC Era

PC sales sank in the fourth quarter of 2012 due to increased competition from smartphones and tablet devices, Gartner said in a report released Monday.

Shipments totaled some 90.3 million units — a 4.9 percent decline from the fourth quarter a year earlier, the firm found. In the U.S. market, PC shipments fell 2.1 percent from the year prior to 17.5 million units.

The decline was attributable largely to consumers purchasing tablets and smartphones rather than replacing older computers, Gartner said, which could suggest that consumers are starting to see the tablet as suitable for content creation as well as consumption.

“It is depending on how you define content creation,” said Mikako Kitagawa, principal research analyst at Gartner. “If you think posting photos and comments on Facebook is content creation, then yes, a tablet can do some content creation.”

However, the PC will still remain the de facto device for content creation, she added.

“When it comes to more complex activities such as working on a spreadsheet or updating a personal website — not just a microblog or simple blog — then PCs offer higher productivity compared to tablets,” Kitagawa told the E-Commerce Times.

Tablet Market

The slowdown in PC sales could be attributable to a number of factors, including the fact that many machines running Windows 7 aren’t all that old — the operating system was introduced in 2009. Many users tried to remain on the Windows XP OS for as long as possible.

The fact that there has been little pressure to upgrade is one factor, but the surge in mobile device use can’t be ruled out either.

“The Gartner and IDC Q4 PC sales numbers are an obvious disappointment, but the falloff is the result of a combination of factors, including users migrating to mobile devices and stagnant economies — especially in Europe and parts of Asia,” said Charles King, principal analyst at Pund-IT.

“Those factors also work in concert — that is, for a relatively modest investment, a consumer can purchase a low-end laptop PC, a good quality tablet or a high-end smartphone,” he observed.

“The bottom line is that smartphones and tablets, either separately or in concert, can deliver a literally better bang for the buck than many PCs,” said King.

Broken Windows

It wasn’t supposed to be this way. Microsoft had pegged its strategy on its new Windows 8 OS, which would mimic the tablet experience on a laptop — and potentially even a desktop.

“The lack of Win 8 uptake suggests that even while most users continue to use conventional PCs, they’re not upgrading them. The fact is that without touch-enablement, Win8 is not a compelling product,” King told the E-Commerce Times.

“That’s lousy news for PC makers,” King noted, “but things could pick up during the coming year as larger numbers of touch-enabled Win8 laptops, tablets and all-in-one PCs become available, along with next-gen Intel CPUs — by Q4 — which will deliver significantly better battery life and system performance.”

The window thus isn’t closed for Windows 8, and in the long run the OS could gain steam and traction. Still, it hasn’t been the breakaway hit that Microsoft no doubt wanted it to be.

“Not many PCs had fully taken advantage of Windows 8 yet. There was still lots of confusion around W8 from the vendor perspective; thus, consumers did not get the right messaging,” said Kitagawa.

“The industry needs to develop more intuitive touch-based PCs in order to take advantage of Windows 8 and have better communication with consumers,” she said, but noted that it’s too early to call it a success or a disappointment.

In some quarters, though, it is never too early to cast blame.

“Windows 8 had a nasty problem. Most of the hardware that was to have launched with 8 was delayed until this quarter because of a severe shortage of touchscreen displays,” said Rob Enderle, principal analyst at the Enderle Group.

There’s been “a lot of finger pointing as to who screwed this up,” he told the E-Commerce Times, “but given that Sinofsky had to step down, my guess is that most pointed to him.”

Mac Picks Up

An interesting twist on this is that Apple’s Mac has seen a surge while Windows-powered machines have slid. Are people actually “thinking differently,” or is something else at play?

“The Apple Store draw helps sales, and Apple had decent store draw in the fourth quarter,” said Enderle.

However, closer examination must be paid to these reports, he added.

“PC shipments from Gartner come from the vendors, and Apple really doesn’t share these things officially,” Enderle added. “With all the pressure downward on their stock price, the likelihood that they may overinflate this number goes up.”

This could explain why the numbers from competing analyst firms don’t exactly show the same thing. While Gartner noted that Mac sales increased, IDC’s numbers suggest otherwise and actually indicate a drop in sales. If Apple did see a bump, could it have resulted from iPad owners looking differently at the Mac?

“The news for Apple was a bit confusing, since while Gartner showed a dramatic surge in Mac sales, IDC showed a slight decline,” noted King. “There does seem to be a connection between Apple’s iPhone/iPad leadership and Mac sales.”

It is also worth noting that Apple has experienced wild success in smartphones and tablets but only mild improvements, at best, in Mac sales.

“It simply demonstrates that the company is not immune to economic factors,” King pointed out. “That is, tens of millions of consumers who have adopted the iPhone and iPad aren’t willing to pay the premium to become Mac owners.”

1 Comment

  • As a PC builder and somebody who has been in the trenches since Win 3.x never have I seen the press get things so WRONG WRONG WRONG but never let it be said old Hairy wasn’t willing to fix a mistake so here is what is REALLY happening.

    Once upon a time there was a contest called "the MHz wars" where 2 companies jumped past each other in speed. This they did VERY fast, in one four year period old Hairy went from a 300MHz to a 2200MHz, things were going THAT fast. This allowed the OEMs, chip makers, and a certain company named MSFT to get big and fat, because taking advantage of a faster clockspeed? Trivial to do when it comes to programs. What happened is a PC you bought less than 2 years ago would already be struggling to run the latest software and because things were changing so rapidly there was no point in even attempting to upgrade the machine you had. This meant that every 2-3 years pretty much everybody using PCs were chunking their machines every 3 years or so, creating lots of opportunity to make money for those mentioned above.

    Then a funny thing happened, one of the two companies went to "win the war" with a new chip called Netburst and found that once they got up to around 4GHz things were getting so hot the systems would end up needing exotic cooling just to keep from melting, and the power usage was going through the roof. the other company also saw this and they both decided that the MHz wars were over. So what to replace it with? Ah, instead of selling them faster chips we’ll sell them MORE chips by putting multiple cores on the same die!

    But this caused a side effect they hadn’t forseen, for writing software that takes advantages of a higher clockspeed was trivially easy but to take advantage of multiple core and threads? Very VERY hard. This took away one of the reasons people had to throw out their PCs every few years, the other being that they would end up bogged down running too much stuff at once and need a faster chip, but with multicores the machines just didn’t bog down like they used to.

    Which brings us to where we are today, just look at the specs of what I was selling on the LOW end FIVE years ago…A Phenom I X4 with 4 GB of RAM and a 500GB HDD. Now how many average folks gonna be able to come up with more work than that quad can handle? Not many. Even on the gamer front the gamers quickly found their chips were so overpowered that even the heaviest games couldn’t keep up, for over a decade i built a new PC every year and a half like clockwork, now? My PC is going on 4 years old, why? What game out there can use more power than my 6 core CPU with 8GB of RAM can provide? Next month I’ll swap out my 4 year old GPU for a newer model and will be able to continue playing every game at 60+ FPS.

    So there you have it, the PC is NOT dying, its simply become such a fire breathing monster that folks don’t need to replace it until it dies. Even on the laptop front I see folks with 4+ year old laptops, what mobile job can the average user come up with that will max out a Core Duo 1 or Turion X2? None.

    We will see the SAME THING happen to ARM in less than 2 years, there are already $50 dual core tablets being built in China as we speak and just like X86 ARM is running into a wall only for ARM its power/heat per IPC, which is why Nvidia is up to 5 cores now, just to try to get the performance of even a 6 year old Intel chip. Just as PCs have gotten so nobody replaces until they die so too will ARM tablets become so overpowered that folks will just use them until they die. Granted that will be a little faster with something as flimsy as your average tablet but it certainly won’t be like the sales of today.

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