PC Industry: Is the Endgame Nigh?
Is it really possible that the ubiquitous PC, a device that revolutionized the way we work, play, interact and pretty much do everything else, can actually be on its last legs? Is it just possible that a device which replaced countless ones in its time be ultimately upstaged by a more powerful, potent and smarter device? Is it going to a case of poetic justice?
The Signs Are All There
On April 10, 2013, the IT world woke up to disturbing news – that PC (desktops and laptops combined) sales have fallen 14% in the first quarter of 2013 when compared to the same period last year. And this is not the first time this is happening – it the fourth straight quarter that sales of PCs have shown a falling trend, and what is more disturbing, will probably maintain the downward trend for some time.
The fall in sales is across the board for all PC makers, although some have shown steeper fall than the others. For example, while HP, the largest PC maker, suffered a 24% fall, the fourth ranked Dell posted an 11% fall. Acer also suffered and Lenovo posted flat growth, with Samsung probably the only mainstream PC maker to show any growth – probably on account of the success of Chromebooks.
Why is this Happening?
The reason for this is not far to seek, and most readers would have guessed it by now. It is primarily due to the ever increasing popularity of mobile devices – tablets and smartphones. The misfortune of PC makers is directly translating into windfalls for tablets and smartphone makers – segments that have posted blistering growth rates of 69% and 50% respectively.
In other words, there is an increasing shift in user preference from PCs to mobile devices –as far as computing tasks are concerned. Now, even though it stands to reason that all possible tasks carried out by PCs cannot be undertaken by mobile devices, yet a huge chunk of user activity is shifting from PCS to tablets and smartphones. Most experts agree that most of the casual activity – social networking, surfing the web, checking e-mails etc is not being done on the PC anymore – it is taking place on mobile devices. Gaming, a popular activity that was dominated by the PC, is also increasingly shifting to tablets and smartphones. This is endorsed by the recent Facebook announcement that daily mobile users exceeded daily PC users, making it a ‘mobile company’.
Also, many prospective first time PC buyers are skipping the PC alternative altogether, instead opting for a cheaper tablet or a smartphone. For example, in India, one of the leading potential markets for smartphones, more users are accessing internet on mobile devices than on PCs.
Observers have also been at pains to point out that the PC is not “dying” anytime soon – it is just that the ‘upgrade cycle’ has been considerably increased. In other words, users have not stopped buying PCs altogether, they are just buying less of it. The PCs that they are already using will live longer since they have a lighter workload, and the latest, cutting-edge applications are moving from the PC to the mobile devices ecosystem. So, there is no compulsion for users to upgrade the existing PCs, resulting into an all round fall in sales.
Is Windows 8 to Blame, Too?
Windows 8 has emerged as the unlikely whipping boy when the gloomy PC sales figures were released this time around. Most users that have actually migrated to using the Windows 8 have been vocally pointing out that the incremental gains are measly compared to the costs of upgrading from the previous version. A number of users are also left confused by the unfamiliar interface of the new OS, and less than stellar performance in the tablet mode. Also, most PC users perceive that the costs incurred in migrating to the touch screen format needed for Windows 8 are significantly high.
The Last Words
Opinion is sharply divided over the tenacity of the PC industry. A lot of writers have pointed out the famous Mark Twain quote – “the reports of my death are greatly exaggerated”. As I have pointed out earlier in the article, the PC industry is not really dead in the strict sense of the world, just that the sales are falling due to less people updating the hardware. Yet, a decreasing trend could well mean that sales may drop off to a point where the existence of PC industry as we know it may be threatened. I will simply quote from a prominent article that firmly states that the death of the PC industry is actually imminent –
As to the main objection, though: how can you declare a market that’s still selling hundreds of millions of units. dead? Two responses. First, semantics: “dead” is being used for “dying” here, and if you’re a literalist, I apologize.
My second point goes to the trendline, though. Consider: the desktop PC isn’t dead. Would you go buy one, versus a notebook? RIM isn’t dead. Would you go buy a BlackBerry? And if I’m about to start development work on a AAA game title that will require four years to develop, do I make it for the PC?