Narrative: The Decline of PCs
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Narrative: The Decline of PCs (Jan 28, 2017)
Written: January 28, 2017
PC shipments have been in decline for several years now, due to the combined effects of tablet computers and smartphones offering alternatives for both individual workloads and users’ entire workflows. Simply put, there are many people and workloads for which a PC is overkill, and a simple tablet or even a smartphone can do the job just fine. In addition, with PCs now one of several devices people use rather than the only or primary device, those in use can last for longer before being upgraded, so upgrade cycles can lengthen.
All of this is making life hard for PC makers, chip vendors and Microsoft, as the operating system vendor for the vast majority of PCs sold. If you factor in market share gains by Mac and ChromeOS devices, Windows PCs are even harder hit than the PC market overall. This has forced consolidation and market exits over recent years, with a small number of major PC vendors still doing reasonably well and gobbling up an increasing percentage of the total market, while many other vendors flounder.
Microsoft didn’t help itself in the early days of the competition from tablets like the iPad, by overreacting and launching Windows 8, which attempted to make touch interfaces the primary mode of operation on all PCs and force a single operating system onto both PCs and tablets, compromising both in the process. Windows 10 fixed many of the problems caused by Windows 8, but by that time many PC users had been turned off, and many have stuck with Windows 7 even as Microsoft has created strong incentives to move to its latest version.
Some analysts are calling for a return to growth in PCs in the next year or so off the back of a stronger buying cycle among enterprises finally ready to adopt Windows 10 along with slightly stronger trends among consumers, but I remain skeptical that PCs are a growth market in the longer term. Certainly, for many of the first time computing users that will come out of emerging markets in the next few years, something other than a Windows PC will fill that need, whether it’s a tablet or smartphone or a Chromebook.
★ Lenovo Reports Q2 Loss, Flat Smartphone Sales (Aug 18, 2017)
IDC Adjusts Forecast PC and Tablet Growth Downward (May 26, 2017)
IDC has adjusted its combined PC and tablet forecast downwards by several percent, with the overall picture one of shrinkage through next year followed by modest growth from 2019 to 2021. Within that broad category, desktops and standalone tablets are forecast to decline strongly, while laptops will grow slightly and “detachable” tablets (those made to be used with keyboards) will grow the fastest. IDC says it’s revising its forecast downward because those detachables aren’t growing as fast as it had thought. It’s also worth noting that any growth that exists right now in the market is entirely in the commercial market, while the consumer PC market (even including tablets) continues to shrink). It’s also worth noting that even in 2021, IDC forecasts that those detachable tablets will only be 11% of the total market. We’re continuing to see a diversification of the PC market across these various categories as both vendors and consumers try to figure out which combinations of tablet and laptop form factors and features work best, with much of the action so far at the premium end of the market. Things could get interesting (and move off IDC’s forecast trajectory) if we start to see some meaningful competition in that detachable space from vendors targeting the mid market, but there’s little sign of that happening yet.