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PC business set for worst decline ever, no relief in sight

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Despite assurances from companies like Intel that the worst is over for the PC market, the tune coming from analyst firm IDC paints a very different picture. According to IDC, PC sales are now expected to fall by 10.3% in 2013 — the worst contraction on record. The new forecast suggests that PCs will drop a further 4% in 2014, before stabilizing at levels last seen in 2008. Granted, that's still more than 300 million units shipped per year, but the contraction is Acer and Asus take European hammering as PC sales collapse.

The commercial market is doing better, with declines of  around 5% year-on-year, which means it's actually hiding some of the problems in the consumer market. Take out the impact of commercial sales, and consumer sales are down even farther — nearly 15% year-on-year. Most troubling is the suggestion that the reason people aren't upgrading PCs is because there's so little reason to do so. As Jay Chou, Senior Research Analyst at IDC states, "Despite industry efforts, PC usage has not moved significantly beyond consumption and productivity tasks to differentiate PCs from other devices. As a result, PC lifespans continue to increase, thereby limiting market growth."

In short, PCs have failed to excite the imagination for uses beyond their traditional roles, and are declining sharply as a result. The fall is particularly acute in desktops in emerging markets, which are expected to decline to just 78.2 million units shipped by 2017, from 94.8M in 2012. Portable systems and convertibles should fall from 110.4M units to 106M units in the same time period.

Forecasts like this are why Intel is pivoting so hard towards the tablet market and now prominently talks up its support for multiple OS platforms. In order to maintain its historic revenues. The company has some hope of maintaining significant revenue on the PC side if sales stop plummeting, but it needs a cross-device portfolio to weather the contraction. AMD, meanwhile, is betting on consoles to buffer its own sales.

That leaves the OEMs themselves, and they're going to take a beating here. Dell has already gone private, HP has reentered the tablet market, Lenovo has aggressively courted emerging markets, and Asus has its own line of tablets and convertible systems. If Q4 sales fall as steeply as IDC expects, January's quarterly announcement is going to be ugly. Unfortunately, there's no real recourse for the various OEMs — when HP was considering selling off its PC business a few years ago, one of the major questions was what company would be large enough (and interested enough) to buy it at anything less than a firesale price?

Gaming is one of the most compelling remaining reasons to upgrade PCs on a regular basis, but with relatively cheap Steam Machines on the horizon, even that reason may soon disappear. There will likely always be a place for the standard PC (so far, no control scheme has come even remotely close to efficiency and precision of keyboard and mouse), but it looks like manufacturers will soon have to think of a way to take our money.

Now read: Acer and Asus take European hammering as PC sales collapse

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Source: https://www.extremetech.com/extreme/171988-pc-business-set-for-worst-decline-ever-no-relief-in-sight

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