PC sales suffer biggest slump on record, claims IDC

April 11, 2013 // 10:20 a.m.

Tags: #idc #industry #microsoft #pc #pc-industry #pc-market #pc-shipments #post-pc #sales #shipments #tablets #windows-8

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.

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