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PC sales suffer biggest slump on record, claims IDC

PC sales suffer biggest slump on record, claims IDC

Market watcher IDC has suggested that the industry's biggest single-quarter slump since its records began can be blamed on Windows 8 and its divisive new user interface.

Industry watchers have announced the largest single-quarter decline in worldwide PC shipments since monitoring began, as consumers decline to buy new hardware and instead make do with what they've got.

That the PC market is struggling is no secret: a hoped-for uptick in sales as a result of the launch of Microsoft's Windows 8 with its divisive Modern UI touch-based interface failed to materialise at the start of the year. While the faltering global economy must shoulder the brunt of the blame, IDC research director David Daoud claimed that a mishandled launch didn't help matters. 'Consumers expected all sorts of cool PCs with tablet and touch capabilities' claimed Daoud. 'Instead, they mostly saw traditional PCs that feature a new OS [Windows 8] optimised for touch and tablet with applications and hardware that are not yet able to fully utilise these capabilities.'

Now that more whizz-bang devices like Microsoft's Surface family of tablet-cum-PC hardware are starting to appear, the industry had hoped for a much-needed reprieve. Unfortunately, what it has instead received is the single biggest quarterly downturn in shipments since IDC began monitoring the PC market in 1994.

According to the company's figures, PC shipments worldwide in the first quarter of this year totalled 76.3 million units, equating to a drop of 13.9 per cent compared to the same quarter last year - almost double the projected decline of 7.7 per cent. The low end of the market, the company explained, is seeing losses due to companies taking netbooks off the market in favour of pushing Android-powered sub-£100 tablets, while the high price of Windows 8-based systems with touch-screen capabilities - a requirement if the user interface formerly known as Metro is to make a scrap of sense - is putting cost-conscious buyers off an upgrade.

IDC is clear about where it is placing the blame for what is the worst quarter in the PC industry for years. 'At this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market,' claimed Bob O'Donnell, IDC's programme vice president for clients and displays. 'While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the UI, removal of the familiar Start button, and the costs associated with touch have made PCs a less attractive alternative to dedicated tablets and other competitive devices. Microsoft will have to make some very tough decisions moving forward if it wants to help reinvigorate the PC market.'

'Although the reduction in shipments was not a surprise, the magnitude of the contraction is both surprising and worrisome,' added Daoud. 'The industry is going through a critical crossroads, and strategic choices will have to be made as to how to compete with the proliferation of alternative devices and remain relevant to the consumer. Vendors will have to revisit their organisational structures and go-to-market strategies, as well as their supply chain, distribution, and product portfolios in the face of shrinking demand and looming consolidation.'

Microsoft is doing its bit to boost sales, offering a slight discount on Windows 8 licences for those upgrading from Windows XP, support for which it is to cease in twelve months time, while simultaneously warning businesses that continuing to rely on allegedly-outdated hardware could cost them more than it saves thanks to hardware failure related downtime. Initial indications, however, are that businesses simply aren't listening; whether that will change as the Windows XP support deadline looms closer is not yet clear, but those who rely on PC sales for their bread and butter will be crossing their fingers it does.

It's worth putting things into perspective, however: while IDC may have only been watching the market since 1994, it's possible to gaze back still further to a time in the 1980s when the home computing market suffered a crash that saw British giants Sinclair Computers and Acorn sold for pence amid stagnant stock and mounting debt. Compared to that momentous event in computing history, this latest dip is little more than a hiccough - but if it continues unabated, it's not hard to imagine some of the smaller manufacturers going the way of their microcomputing predecessors.

22 Comments

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Flibblebot 11th April 2013, 10:35 Quote
I think the rise of tablets is more to blame than Windows 8 - the rise in popularity of tablet devices must be having more of an effect than the relative failure of a new version of Windows. After all, so many people only use their PC for Internet and email, things which most tablets are perfectly capable of handling - for a fraction of the price of a new PC.
Snips 11th April 2013, 10:39 Quote
A laptop with touchscreen is a great thing with Win8 but cheap options just haven't materialised. However, I was emailed an i3 ASUS touchscreen laptop this morning for £389.99 which isn't that bad at all. The retail outlets especially PCWorld are sitting on their stock of none touch laptops and keeping the prices the same.
Shirty 11th April 2013, 10:53 Quote
Quote:
Originally Posted by Snips
I was emailed an i3 ASUS touchscreen laptop this morning for £389.99

Now that's a delivery method I could learn to love. Instant delivery cheesecake.
Spreadie 11th April 2013, 10:53 Quote
Laptops aside, I've only ever bought one PC; that was more than twenty years ago. I don't imagine many people are considering buying a traditional PC any more, which is does make me wonder about the longevity of the components market for enthusiasts.

Tablets are much more "pick up and put down" than a laptop, and (even I admit) a better option than a netbook, but I'd still rather have a laptop's functionality. The i3 Asus touchscreen laptop Snips refers to is certainly more appealing to me than any high end tablet.
Corky42 11th April 2013, 11:33 Quote
Its seems to me this maybe a case of the perfect storm, XP having its support extended a while back so people not upgrading, Windows 8 without the familiar desktop+start button without using extra programs.

Cheaper tablets that do what people need, the current economic climate, the raft of new consoles not released yet pushing games and hardware to a new level.
Roskoken 11th April 2013, 11:52 Quote
Corporations probably just cant justify cramming a sky scraper full of pc's anymore on account of the fact everyones broke.
lacuna 11th April 2013, 12:15 Quote
Havent used my laptop since I got my ipad 16 months ago. My PC is based around a 10 year old 3ghz P4 but I still cant fully justify replacing it.
jrs77 11th April 2013, 12:25 Quote
Blaming it on Win8 is a cheap shot at Microsoft imho.

The bigger reason is tablets and smartphones. All those people who only use the interweb for communication and media-playback don't really need anything more powerful or bigger.
A PS3 or Xbox is sufficient enough for this task aswell, while a gaming-device to play the newest titles.

Another reason is the economy ofc, as lots of people simply don't have much money to buy a new PC and keep using their old ones, which are still powerful enough for most tasks. A C2D E8400 based PC isn't that slow really, when only doing some office or even some video- or photo-editing of your last holiday.
The tech-people allways forget to look at the normal PC-users, who are doing perfectly fine with their 6 year old PCs.

I'm undecided myself aswell, if I should buy new hardware, when Haswell etc gets released, or if I simply wait for the 14nm parts some years ahead.
And now that I've basically stopped playing games, I couldn't care less about the newest developments. And alot of people have moved from PC-gaming to browsergames and mobile gaming on their smartphones and tablets aswell, so the market for PCs shrinks even more.

Wait for next years analysis, when the new consoles are released. PC-sales will drop even more.
V3ctor 11th April 2013, 12:54 Quote
I have a friend that is going to buy a new "hardcore pc", because his last one lasted 5 years (Q6600, 8800GTX).

HW is too ahead of Software, maybe with these new consoles games get pushed harder and will "make" people buy new pc's or components
runadumb 11th April 2013, 13:01 Quote
Whenever I did my current build 3 1/2 years ago I feared it may be my last. I am still unsure whether or not to go haswell this year or wait another year for broadwell but I WILL be upgrading in the next 18 months, which I find some comfort in. The decline was not as severe as I had feared.

I use my PC often and for heavy gaming so I'm happy to put the cash in. Although I fully understand why most people don't upgrade or buy new hardware very often as unless you are gaming a Core2Duo/Athlon X2 5500 era chip is fast enough for most tasks.

Then recently watching my parents and sister get hit with virus's makes me think "why do they put up with this at all?" as a tablet would probably be a better option for them. The OS's just aren't quite there yet but give it a year or 2 they'll have no reason to go PC.

While PC gaming has seen a great upsurge the last 2 years I do fear that when the masses stop buying PC's, parts for a gaming rig get too expensive. I hope there's a decade left yet but I have my doubts :/
MjFrosty 11th April 2013, 13:04 Quote
It has nothing to do with Windows 8. Our website has just undergone a massive overhaul with HTML 5 in order to be accessible to tablet and smartphone devices. Some people may be surprised at how many homes no longer even have a PC or a Mac, and only have a tablet device. The type that like to say "I've got an iPad".

That's nice for you.

Anyway, consumerism, it's for idiots.

Then you have the other majority as mentioned that are totally happy with that they've got. A 4 to 5 year old PC will happily do everything most people want it to do. We are at that stage now where an ageing Core 2 Duo system still holds up. Will browse, play music, movies just as well as a newer system.

Joe Blogs doesn't need an i7 with 16GB RAM. Nor does he probably know what an i7 is. Mainstream PC's won't die out, but I don't think there will come a time where it'll be as booming as it was 10 years ago.
kingred 11th April 2013, 13:16 Quote
Iunno the PC gaming market probably hasn't shrunk, consider this.

There are around 500'000 people playing LoL, with 343'000 playing Dota2. There are still around 10 million subscribers to World of Warcraft, 500'000 current subscribers for eve online. 45 million active users for world of tanks. The slump they are probably talking about is within relation to traditionally distributed video-games with large publishers.
Xir 11th April 2013, 14:00 Quote
I wonder what percentage of the market is consumerdevices, and what percentage is corporate computing.
Tablet's will have made a big hit in the consumermarket.
But I don't see a lot of (big) companies going for tablets. Not for their Office/SAP/CAD junkies anyway.
If there's a decline in the corporate segment as well, that may well be to blame on Win8.
I suppose most companies haven't been on Win7/office 2010 for very long, and switching to Win8 now simply doesn't make sense.
Flibblebot 11th April 2013, 14:17 Quote
The thing is, do corporates actually buy PCs any more? Most large organisations I've been involved with over the last few years have moved towards leasing their PCs with a three- or five-year replacement cycle - so does this get counted as a PC sale or not?
Gareth Halfacree 11th April 2013, 14:36 Quote
Quote:
Originally Posted by Flibblebot
The thing is, do corporates actually buy PCs any more? Most large organisations I've been involved with over the last few years have moved towards leasing their PCs with a three- or five-year replacement cycle - so does this get counted as a PC sale or not?
IDC - and most other market watchers - track shipments, rather than sales. A shipment is the number of boxes that go from the manufacturer into the channel - whether that's to retail channels like PC World and Ebuyer or other channels like the lease market you mention. So, IDC's figures for the quarter would include hardware sold to leasing companies, but only when it leaves the manufacturer to go to the leasing company; it doesn't get counted as a second 'shipment' when the leasing company sends it to its temporary owner for three years, nor when it sends the same hardware to a different owner three years later. Shipments can also be returned: in the retail channel, companies will often buy hardware on a sale-or-return basis: if I take receipt of a shipment of 200,000 Dell PCs to sell in my chain of high-street shops, but only end up convincing 100,000 customers to buy one, I can send the spare 100,000 back to Dell for a refund.

It's why you have to be very careful when you get a press release proclaiming System X to be the "best-selling device ever." Most of the time, they're talking about shipments to channel partners - not sales to end users (known in the biz as 'through-sales.') A shipment is not a forgone conclusion: companies have been known to fudge the numbers in the past by convincing customers to take receipt of massive quantities of hardware at the end of the financial year, making the 'units shipped' number for the year take a big jump, only to allow them to return the hardware a week later as unsold for a full refund.

That's by the by, however, and has no impact in what IDC is tracking here; I offer it only as an example of how shipments do not equal sales. When IDC reports ~70 million shipments, you can bet that actual sales are lower.
fdbh96 11th April 2013, 15:01 Quote
Surely PCs are reaching a bit of market saturation, as most people who will ever want one more than likely has one. For example, my gran would never dream of getting a pc, as theres no need for her to sit in front of a screen with kb+m when she can sit in her armchair with an ipad. Sure it'll be a long time before pcs die out but its hardly windows 8 fault that they aren't selling. If it was im sure that manufacturers would start to support linux a bit more.
rollo 11th April 2013, 15:17 Quote
Gaming pcs is a tiny market so even if the consoles are awesome its not going to encourage joe blogs to upgrade as they game on a console or tablet already.
Snips 11th April 2013, 15:19 Quote
Quote:
Originally Posted by Shirty
Quote:
Originally Posted by Snips
I was emailed an i3 ASUS touchscreen laptop this morning for £389.99

Now that's a delivery method I could learn to love. Instant delivery cheesecake.

haha :) anyway I lied, it was £379.99
rollo 11th April 2013, 15:23 Quote
Gaming pcs is a tiny market so even if the consoles are awesome its not going to encourage joe blogs to upgrade as they game on a console or tablet already.

Truth is for most people a 6 year old core 2 duo is more than enough, if they have added a ssd its still very quick on the day to day that it will be used for.

Facebook, Microsoft office music and video.

Pc my mam uses has a old AMD CPU in it that I give her. Last pc we brought from a shop was 14 years ago.

High end and enthusiast market for pcs is tiny in comparison to the total sales the likes of dell get.
NethLyn 11th April 2013, 15:35 Quote
Quote:
Originally Posted by fdbh96
Surely PCs are reaching a bit of market saturation, as most people who will ever want one more than likely has one.

This. Same issue with flat screen TVs, it's only the die hards who have kept anything old and the last upgrade in my family finally got rid of the only single-core left. The other rellies that used to ask me for PC advice all the time just leapfrogged laptops to go to Google Nexus and other tablets.

If the drop in boxed shipments mean that companies suddenly start remembering upgraders and enthusiasts again, beyond flogging laptop bags and external add-in drives, so much the better.
Gradius 11th April 2013, 23:50 Quote
Big culpit: tablets + pads.
schmidtbag 12th April 2013, 15:03 Quote
IMO, PC sales are declining purely coincidentally, due to the following reasons:
  • Hardware is good enough and cheap enough that people don't have a need to upgrade
  • Windows 7 is stable, secure, and powerful enough that people don't have a need to upgrade
  • Windows 8 isn't very appealing to desktop users, and every major desktop environment in linux is undergoing drastic changes (making it have very few good options)
  • Tablets are cheaper, more "cozy" to work with, and accomplish most of the tasks people use a home PC for
  • Computers are relatively expensive and most people don't have the money
  • DRMs are a deterrent to PC gaming

The coincidence is all of these things happened within the past couple years and are really starting to take effect now. While I don't see many of them reversing any time soon, I think there's a point where the PC market will start to stabilize in sales - it just likely won't ever go up again.
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