Bad news, the PC market is getting down to business

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Laptops like Lenovo's ThinkPad Yoga are using novel form factors to attract consumers. Image: Lenovo

21 January 2014

Looking at the IDC fourth quarter figures for the EMEA PC market, it’s hard to escape the suspicion that desktops and laptops/notebooks are becoming predominantly business machines rather than products for the home.

According to a report in The Register, Q4 shipments of portables and desktops into EMEA channels declined 6.4% on 2012 to 26.7 million units. Overall, shipments were down 15.7% for the whole of 2013 compared to 2012.

For the third consecutive quarter, shipments to the business sector were higher than those to the home market. Indeed, commercial shipments of desktop PCs rose by 1.9% in Western Europe but those for the home market fell by 8.3%. Even more ominous was that the decline in the shipments of home PCs occurred in the run up to Christmas, usually one of the peak periods for the retail market.

According to IDC, the end of Windows XP support and some ageing of the PC installed base fuelled enterprise renewals in the fourth quarter. With the deadline for the end of Windows XP support fast approaching in April, there could be room for more enterprise sales in 2014 but it’s hard to see what factors might prompt a resurgence in sales of home PCs and laptops.

The latter look particularly vulnerable to the tablet phenomenon and it’s no surprise that shipments of laptops/notebooks suffered the most, falling 19% in 2013. By contrast, PCs were down 9.6%. Even so, those are significant figures with laptops declining by a fifth and PCs falling by a tenth. OEMs, unimpressed with Windows 8 are even offering Windows 7 machines at a discount (HP), modifying Windows 8 with apps to make it more like its predecessor (Lenovo) or even pushing Linux as an alternative (Dell/Alienware).

For a large number of home users, the PC is becoming a peripheral machine or docking station that they interact with to upload or download stuff to or from (be that music, videos, applications, photographs etc, etc). But they don’t use it as their primary IT device. That trend is likely to become even more pronounced over time as more and more of their music, video, photos and documents (I hesitate to call it ‘content’ because that’s such a soulless word) is stored up in the cloud.

Also, with many people able to access the Internet and stream stuff (films, music, video) via their TV screens, there is a diminishing requirement for them to hunch around the family PC to watch it (or stream it). Let’s not forget that a lot of gaming consoles also feature Internet access, as well as applications for the likes of Youtube and Netflix, and all of them are hooked up to TV screens as well.

With the PC being pushed to the margins of the home rather than the centre (which is where some of the platform’s supporters initially predicted it might be by now), the need for laptops and notebooks as satellite machines circling in orbit around it is increasingly diminished too. That role is being fulfilled increasingly by tablets. Unlike the corporate world where the refresh cycle seems to still be based on replacing a desktop with a desktop and a laptop with a laptop, the home environment is reaching the point where the laptop is being superseded by the tablet (or tablets and smartphones). It surely can’t be long before the obligatory laptop for students heading to university is replaced by a tablet, if it’s not happening already. And while the PC is clinging on, it is being pushed to the margins as well.

How many home users are likely to replace their desktop PCs with another one when the time comes to get rid of their old machine? What unique attraction does the PC platform have to convince them to continue investing their money in it? As a home server, perhaps? Possibly. For high-end processing tasks? But just how much of that functionality will need to continue to reside in a single box in the home (and if it does, will it have to be a PC?) and how much of it can be provided via the Internet and over a home network to the satisfaction of most home users?

And while the looming Windows XP deadline is helping to cushion the effects of the overall decline in desktop and laptop sales as businesses seek to replace their ageing machines with ones that Microsoft still supports before April, companies are likely to start re-examining their need for PCs and laptops in the next few years. And if they don’t, their employees who have grown accustomed to using tablets and smartphones at the expense of PC technology in their homes, will do it for them.

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