PC sales plunge as computing goes mobile
New data from research firm IDC suggests that as more people buy tablets and smartphones, the need to upgrade their PCs is less pressing.
The American dream used to be owning a home, a white picket fence and having a family computer. Now, it's having a tablet in the house.
Research firm IDC notes that PC shipments fell 13.9% in the first quarter to 76.3 million units, sharply worse than the 7.7% year-on-year decline it had forecast.
This is the worst quarterly contraction since IDC started keeping data, and it's mostly due to tablets and smartphones taking over. IDC also paced blame on Microsoft's (MSFT) Windows 8 operating system. (Microsoft owns and publishes MSN Money.)
"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," IDC's Bob O'Donnell said in the press release.
A different beast
Apple (AAPL) isn't immune to the slowdown. The Cupertino, Calif., company saw a 7.5% year-on-year decline in U.S. sales of its personal computers. But Apple is a different beast. Its iPad is the best-selling tablet, according to IDC. It's clear that iPads and other tablets are heavily affecting PC sales. And that Apple, with its first-mover advantage in the space, is enjoying the benefits.
Almost the entire PC space saw weakness in first-quarter sales, as companies like Hewlett-Packard (HPQ), Dell (DELL), and Asus posted worldwide sales declines in the period. Only Lenovo was able to hold the line globally and even achieve improvement in the U.S. market, where sales were up 13% to 1.27 million units.
Both HP and Dell are undergoing massive restructuring efforts, and Lenovo has been able to take advantage of that, with an aggressive product strategy.
One interesting tidbit is that the decline in PC sales isn't just about price, as the bottom-end vendors aren't growing in the United States. Companies are having a hard time innovating, and that's being seen in the sales figures.
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The PC and Notebook have already surpassed the capabilities of the new gaming consoles (PS-4, X-box 720) before they are even released. As more people realize this there maybe an increase in sales again. I started playing on computers (Commodore 64), then custom desktops, then shifted to consoles (PS-2, PS-3, X-box, X-box 360). I bought a high end laptop about 1 year ago and will never go back to consoles. The graphics, customizable controls, every aspect of the games are so much better on the PC. But the digital downloads, time limits for playing in off-line mode, security and account concerns playing on-line are starting to give me heartburn. Guess I am getting old, I want a hard copy disk of my games, but they are starting to get difficult to find at times. I understand the piracy concerns just wish the game manufacturers could find a better way. Nothing is ever perfect.
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