PC makers can take one of four paths if they want to survive: but can they really make the changes needed?
Grim news for PC makers: they face a stark choice, either to overhaul their business model or just quit making PCs in the next few years.
Analyst Gartner expects the number of PCs in use to decline from around 1.48 billion last year to around 1.33 by 2019, which is going to make life a lot harder for the companies that sell them.
"The PC business model as we have traditionally known it is broken," said Tracy Tsia, research vice president at Gartner.
While the top five mobile PC vendors have picked up 11 percent market share over the past five years (from 65 percent in 2011 to 76 percent in the first half of 2016), that has come at the expense of profit, Tsai said. Gartner predicts that the installed base of PCs will continue to decline over the next five years, which means continuing erosion of revenue and profit for PC vendors.
"The traditional way of gaining shipment market share by competing on price to stimulate demand simply won't work for the PC market over the next five years," said Tsai.
Consumers and businesses are holding onto their PCs longer than they would have done previously, and as business applications and storage are moving into the cloud this means they are less reliant on PC performance in any case. Customers in general aren't as likely to upgrade based on price or specs alone. PC makers have also struggled to figure out the role of the PC in the era of smartphones and tablets: while the rise of hybrid and two-in-one devices has provided a ray of hope, it's a slim one.
According to Gartner, there are four alternative strategies that PC vendors could pursue over the next few years...
Read more: The PC is broken: Time to fix the business model or quit | ZDNet
A good bump in the economy would probably render that analysis inaccurate. Business users as well as home users have been under considerable economic stress the past 5 years. Everyone I know who has an older desktop wants a new desktop, but are waiting for better economic times.
Depends on how you look at it. Sure, hardcore gamers are still likely to shell out lots of money for top of the line kit, but the number of hardcore PC Gamers is relatively small (compared to the overall market).
The problem PC makers have is that, in general, PC's are as fast as they are going to get. Performance only increases marginally year over year. And for most people, PC's are already plenty fast for their needs.
So unless their PC breaks or there is something that comes along to obsolete it, they aren't going to be upgrading.
I agree, Mystere. None of my comps are the latest hardware but all perform very well.
It used to be each new version of Windows needed better hardware but now that trend is reversed!
Glad I don't make desktops.
Tablets and Laptops are probably going to still have good sales due to the fact they're easy to lose, break, and batteries wear out much faster than Power Supplies of desktop units.
Plus, most of Intel's new technology is around wireless and battery life. Getting more power per watt is key, so users may still upgrade their systems to get better battery life. But that won't help desktops.
I have just had a hip replacement so was stuck for a few days in the lounge with Android phone, tablet and HP notebook so can comment on the desktop alternatives.
You are dead right about batteries. They're a darn nuisance! The notebook is a few years old now and doesn't last long on battery power.
Perhaps the Samsung Note 7 battery fires will temper the love of lithium powered devices!!
But, as far as I am concerned, you just can't beat the desktop for convenience, power, screen size and real keyboard! And you don't have to charge it all the time!
Desktops still rule for me.
Perhaps someone ought to inform Intel about this, as they don't appear to be aware of the "Sky is Falling" situation:
Intel boosts outlook on surprising PC sales | OregonLive.com
In my humble opinion, the number of "hard core gamers" has never been larger than it is today, and it's still growing. There are far more people playing PC games and buying them now than has ever been the case. Many of the first-week sales of even mediocre game sales today are far greater than "mega-hits" of ten years ago...selling 5 million copies used to be flat impossible in the lifetime of a game--didn't matter the category. Today, certain games do that in a *week* or less....the market is far larger than ever before. There's Kickstarter's incredible success--just many, many things that are only possible today because the gaming market is so much larger than it used to be. (Look at Star Citizen--only a gigantic, healthy PC gaming market could ever support something like that.) No way would Sony and Microsoft be coming out with new, higher-end consoles, if there was no market for gaming PCs--indeed, Sony stated recently that the main reason it is doing a 4k-capable console is precisely to try and stem the bleed to PCs. State of the art tech for the entire industry is only found in the PC marketplace, etc--but that has always been the case.
The only thing that isn't growing at the moment is the PC OEM business in terms of annual new-box sales...but OTOH, the PC hardware peripherals market is booming...just take a look at the enormous variety available through Amazon or NewEgg, etc. Upgrading is the rule, these days, whereas years ago buying new PCs every few years was the rule. Indeed...peripheral upgrading has become commonplace. I see that increasing, really...it isn't that people aren't buying, it's *what* they are buying that is different.
Tablets and other semi-PC's (as I call them) aren't enough for most people--and of course, cell phones certainly aren't enough for people's computing demands...The PC desktop marketplace is very healthy and it's booming...again, it's just that the ways of measuring it today must be different because the markets themselves and the hardware is a lot different than it used to be. Personally, for instance, at home, I haven't bought a new OEM PC box since 1995...! But I've owned at least a dozen or more "computers" since then by way of buying the components and assembling them--no more difficult today than Lego blocks--or playing a game like Minecraft. And if you can't do it yourself, there are millions of Mom&Pop computer stores in the US alone that'll be glad to sell you a box that they have configured and built themselves from the very same peripheral sources...What's changing is more the way these things are counted than anything else, imo.
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