1. 2013 saw PC shipments contract by 9.8%, the severest on record.
2. The bad news is not over as the category is expected to see another drop of 6.1% in 2014 basis lackluster demand from in developing markets
3. The weak economic environments in emerging markets coupled with significant shifts in device priorities is causing the decline in PC category.
4. Long-term growth in PC shipments is expected to remain just below zero, with shipments in 2018 expected to decline 0.2 percent
The PC is dead and this year’s CES proves it- BBC’s Timothy Lee.
Going by the product roadmap declarations from Intel, the surprising popularity of Chromebooks, the visions of augmented reality and touch based future interfaces and (the old news) Google Glass – computing is evolving and the PC is a dead generation.
The general-purpose PC became the dominant computing paradigm of the late 20th Century because computing hardware was too expensive and cumbersome for most families to own more than one or two of them. But processing power is getting smaller and cheaper, while display technologies with flexible and durable screens are getting more flexible and powerful. The PC was the jack of all trades, but master of none. In contrast, special-purpose designs can be tailor-made for a specific application. As those devices become smaller, cheaper, and more versatile, the cost, size, and complexity of conventional PCs will be more of a turnoff for ordinary users. Right now, no one is clambering for computers in their wristwatches or tables. But the combination of tiny, cheap computer chips and increasingly strong and flexible displays will eventually mean powerful computational capabilities being integrated into a wide variety of household objects.
Obviously, PCs won’t go away completely. After all, IBM still has a thriving business selling mainframes.Also, if you want to do serious spreadsheet wrangling, photo editing, or software development, a Chromebook or a Tablet probably won’t cut it. But most people have no interest in doing those things outside the office. If, like millions of people, you mostly want to check Facebook, read your email, and watch YouTube videos, then a ChromeBook works just fine. And ChromeBooks aren’t only cheaper, they also avoid many of the hassles and pitfalls—software updates, malware, baffling error messages—of Windows PCs. Most users don’t actually need all the features of a standard PC, and for them the extra complexity just means more headaches. Hard-core gamers have long been a key market for PCs. Gaming consoles aren’t new, of course, but the most sophisticated and powerful games have always relied on the superior horsepower of a full-scale PC. However PC Gaming gaint Valve, unveiled a line of special-purpose gaming devices designed to entice PC gamers into the living room. These machines should have enough computing power to satisfy even the most demanding gamers.
The key concern here for PC is that most of the vertical innovation is happening out of PC. This then is the era when the Consumer innovation on PC as a major platform is over.
The overall India PC shipments for Q2 2013 stood at 3.53 million units, representing a substantial year-on-year growth of 24.0% over Q2 2012 and a quarter-on-quarter surge of about 30.2 % over Q1 2013.
State-led manifesto driven spending on notebooks steered commercial investments in the India PC market in Q2 2013. Special projects currently being executed in states like UP, Rajasthan, and Tamil Nadu accounted for roughly one third of the total PC market size in Q2. However, the organic demand for PCs in India outside special projects has weakened, which remains a cause of concern for PC vendors. Further, the rupee slide derailed enterprise spending, as the investment decisions remained seemingly delayed across most of the verticals.
The consumer market in Q2 witnessed a marginal growth over Q1 2013 aided by back-to-school campaigns and loading of stocks across partners in preparation to the impending price hike on account of rupee volatility.
HP recorded its highest ever quarterly market share with an exceptional 34.1% share in Q2 2013 dominating both consumer and enterprise segments
Even with Dell globally going south, Dell in India, took the second position with a share of 11.0% in Q2 2013. Their presence at the entry level price-band has given them much room to drive their volumes.
Acer took third with a market share of 10.4% propelled by large deals in the states of Tamil Nadu and Rajasthan, which fueled their growth in the commercial PC market in Q2
Q3 has historically witnessed strong consumer buying in lieu of the forthcoming festive season in various parts of the country. This is also well aided by the back-to-school/college season and related campaigns undertaken by vendors and partners across different regions. IDC expects 2013 to be no different. Consumer sentiments have peaked at the right time as they begin to reconcile with the market reality on inflation and related pressures. Retail walk-ins have improved and share of consumer wallet looks to move back to PCs, which is an encouraging sign for the consumer PC vendors.
However, the PC business continues to thrive on wafer thin margins and it is still early to comment on the success of new form factors, which were anticipated to drive the overall value of this business. Also, outside special projects, demand from enterprises and government remain largely suppressed painting a gloomy scenario on commercial PC business, in the near future.
Worldwide PC shipments totaled 76.3 million units in the first quarter of 2013 (1Q13), down -13.9% compared to the same quarter in 2012 and worse than the forecast decline of -7.7%, according to the International Data Corporation. This is one of the steepest declines in this segment over the last 19 years.
IDC further states: ” Despite some mild improvement in the economic environment, and some new PC models offering Windows 8, PC shipments were down significantly across all regions compared to a year ago. Fading mini notebook shipments have taken a big chunk out of the low end market while tablets and smartphones continue to divert consumer spending. PC Industry efforts to offer touch capabilities and ultraslim systems have been hampered by traditional barriers of price and component supply, as well as a weal reception for Windows8. The PC industry is struggling to identify innovations that differentiate PCs from other products and inspire conssumers to buy, and instead is meeting significant resistance to changes perceieved as cumbersome or costly”.
Unlike the consumer PC market, the enterprise PC market has seen growth, driven by continuing PC refreshes. The professional market makes up about half of all shipments.
Gartner corroborates the sentiment measuring an 11.2 percent decline quarter over quarter and quarterly shipments of 79.2 million units, a bit higher than IDC’s numbers — and therefore the lowest levels since the second quarter of 2009, per its estimates.
And hence comes the much debated oft enquired questions – Is the PC/Laptop segment going the way of the Dodo??
And the way i see it – and the way i believe it – PCs are not dead. Sidelined – Yes! Dead – No! Steve Jobs would have been correct in a lot of other things – but as far as Post PC era is concerned, i am not the most convinced. To me it always is a PC+ Era – PC + Tablet + Smartphone + Tablet + Watch + Glass + what ever else.
Two principle reasons to support my arguement –
1. PC will be the enterprise hero – it will be the data generator – as opposed to a smartphone, Glass, tablet or watch which will essentially be data consumers and data. There is a point that most of the data will be in Video -but there will still need to be memos and accounts in office parlance. I hardly see any other device doing that as efficiently as the age old PC/Laptop
2. Supporting my numbers for Point 1 – the data generated and conducted through a laptop through 2017 will still be sizeable compared to a lot of other computing machines such as smartphones. The numbers from CISCO VNI on the data per unit machine forecasts through 2011 – 2017 has a point in favour of the Laptop PC.
Even though Laptop contribution to the global data traffic will be around 14%, it would still be the second largest device in terms of data traffic share beyond the ubiquitous smartphone!
Adding the facts and numbers so presented, Laptop category is far from dead – it will be an important member of the convergence and computing econ-system. One that is key to niche computing in enterprises.
Whats your point of view on the future of the laptop?
NPD predicts that 2013 will see the first time that worldwide sales of tablets will surpass sales of laptops. NPD expects 240 million tablets to ship, but only 207 million laptops. That’s just the tip of the iceberg. By 2017, laptops are on track to shrink to just 27% of the mobile PC market.
In a market that has been dominated by Apple, shifting market dynamics are creating the opportunity for a greater variety of choices and screens, which will drive shipment growth in 2013 to 64% Y-o-Y (against 2012). In 2013, 7- and 8-inch tablets are expected to ship 108 million units. That’s a whopping 45% of the market. The 9.7-inch screen size of the traditional iPad is set to shrink to only 17% of the market. Undoubtedly, the huge surge in the 7inch devices is thanks to last year’s launch of the iPad Mini. While Apple is still facing stiff competition in the coming years, it will continue to do well in the market thanks to its brand awareness and high-quality ecosystem.
North America and China, the top two tablet markets, already saw tablets surpass laptop shipments last year. North America will remain the largest market with a 35% share (85 million units) in 2013. Having passed EMEA in 2012 to become the second-largest market for tablet PC shipments, China will have 27% of the global tablet market in 2013 with shipments of 65 million units, driven by small local brands. As the variety and demand for new screen sizes increases, so will market growth in emerging markets. As countries like China and India continue to modernize while growing their middle class, the demand for tablets will continue to grow at an amazing rate. The cost-to-utility ratio of tablets is clearly a winning formula for PC companies and consumers alike.
Meanwhile, desktops and laptops are continuing their fall to niche status. When the vast majority of everyday tasks are handled on cheap, sleek, and portable devices, the need for a traditional computer peters out for most people. Notebook PC shipments have been slowed by declining demand worldwide, reaching even emerging markets where low penetration rates could have stimulated demand. However, increasing tablet PC adoption is stymieing notebook PC growth. The second half of 2013 may provide a respite as new processors aim to bring more tablet PC-like features, such as instant on, all-day battery life, and sleek form factors, to notebook PCs. If the NPD numbers hold true, we can expect a number of players in the traditional PC market to jump ship, and switch to making tablet and smartphones exclusively in the coming years.
The tablet markets saw increasing investments in North America in the second half of 2012, from major brands that tested not only new screen sizes and price points, but also unconventional business models to support their efforts. The subsequent increase in shipments and demand underscored the benefits of segmentation in the market as it drove rapid market expansion. In 2013, further investments are expected worldwide, stoking demand to the point that tablet PC shipments will exceed those of notebook PCs.