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...