Skip to comments.PC market collapses ahead of Windows 8 launch
Posted on 10/11/2012 3:00:13 PM PDT by SeekAndFind
If you can't figure out why CEO Steve Ballmer talks about reinventing Microsoft as a "devices and services company", Jay Chou, IDC senior research analyst, has an answer. "PCs are going through a severe slump". That's being polite in mixed company, when the F-word is so much more appropriate. Third-quarter PC shipments accentuate an already dreadful trend. Analysts expected slowing shipments as the market prepares for Windows 8, but nothing quite like this. The seasonal back-to-school lift collapsed, with even Mac shipments slowing.
Global PC shipments fell 8.6 percent year over year, according to IDC, surpassing the minus 3.8 percent forecast. Gartner's estimate is a more generous 8.3 percent decline. The United States, a region recently in love with tablets, is in free fall, with shipments down 13.8 percent by Gartner's reckoning and 12.4 percent according to IDC. For the better part of a year, analysts excused declining PC shipments as market anticipation for Windows 8. But the slowdown during back-to-school buying season foreshadows weakness ahead.
"There was great hope through the first half that 2012 would prove to be a rebound year for the PC market", Craig Stice, IHS senior principal analyst, says. "Now three quarters through the year, the usual boost from the back-to-school season appears to be a bust, and both AMD and Intels third-quarter outlooks appear to be flat to down".
Declines aren't just global. "The third quarter has historically been driven by back-to-school sales, but US PC shipments did not increase, not even sequentially, from the second quarter of 2012", Mikako Kitagawa, Gartner principal analyst, says.
In earlier quarters, even when other manufacturers saw declines, Apple continued a hearty growth track. Q3 is typically one of Apple's best, given the Mac's popularity among schools. But shipments fell 6.1 percent or 7 percent, respectively, according to Gartner or IDC. Apple is the bird in the coal mine, and it just croaked.
"Retailers were conservative in placing orders as they responded to weak back-to-school sales", Kitagawa observes. "By the end of September, retailers were focused on clearing out inventory in advance of the Windows 8 launch later this month".
Schools typically buy new tech when needed, not when released. Apple launched OS X Mountain Lion near the start of back-to-school buying, while Microsoft guaranteed free upgrades to Windows 8, which goes on sale in 15 days. From perspective of need and timing, there's no reason to wait -- unless perhaps if education bought something else.
Canary in Coalmine
Declining Mac shipments foreshadow much. Apple doesn't announce calendar third-quarter results for two weeks, but Q2 shows an important trend -- at least in the education market. Recent iPad sales wins include 11,000 to Mansfield Texas Independent School District and 25,000 to the San Diego Unified School District. "We sold more than twice as many iPads as Macs to US education institutions", Apple CFO Peter Oppenheimer said about calendar second quarter, in July.
The point: iPad takes away some Mac sales and Gartner and IDC analysts have acknowledged similar tablet trend for Windows PCs.
Once again, tablets lift their screens and raspberry PCs. Despite continued computer manufacturer or trade analyst denials, tablets offer so much at a time when personal computers offer so much less. "While the industry has been focused on shaving excess inventory and preparing to launch a new generation of products, consumers have been looking at alternative devices like tablets", David Daoud, IDC research director, concedes.
The big, new Windows PC designs are all fourth-quarter gambles, but consumers and even some businesses aren't waiting around for them. Twenty-five percent of US adults have access to a tablet, according to Pew (22 percent as owners, 3 percent sharing with someone else in the household). Sixty-eight percent got their tablet within the last year, and 32 percent during 2012. Considering selling prices for 10-inch tablets are about the same, or even more, than laptops, each pad purchase is potentially one taken from PCs.
"The hard question of what is the 'it' product for PCs remain unanswered", Chou says. "While ultrabook prices have come down a little, there are still some significant challenges that will greet Windows 8 in the coming quarter". Microsoft and its OEM partners bank much on Windows 8 tablets, which may be the only hope.
But Windows 8 is a leap of faith, because businesses aren't buying either. "Professional PC shipments in the US began slowing in the second quarter of this year, and they continued the trend in the third quarter", Kitagawa says. "The results indicate that the replacement peak may have passed in the professional sector".
Daoud remains a Windows 8 believer. "As vendors line up innovative new products and designs, consumers are likely to respond positively during the tail-end of 4Q12, and that means a potential return to positive growth at the end of this year". But how can he not be, given IDC's client base?
Other analysts can't keep the faith. "Optimism has vanished and turned to doubt, and the industry is now training its sights on 2013 to deliver the hoped-for rebound", Stice says. "All this is setting the PC market up for its first annual decline since the dot-com bust year of 2001".
Just curious but does anybody still buy tower computers nowadays?
Deep down, Luddites are happier.
For your tech ping list...
The market has changed. There are many things you can do on portable devices that you once could only do on a desktop.
It’s not a collapse, it’s just an evolution of the market. The portable devices we are buying still need computer chips.
Yes, but not as often. The fact is PC hardware has stabilized, there are no more must have add-ons coming out every couple of months. PCs are microwaves now, you use it until it dies, no more constantly looking for excuses to upgrade.
I bought a Win7 desktop last CyberMonday.
I prefer a desktop for most computing, but I also have a laptop that I use when I am watching TV.
I think I suffer from computer hoarding. I’m ashamed to list all the hardware I have in the home, from tower to webbook and everything in between.
I just bought a new one last year. i7 with 50 million zig-a-watts of ram and a huge 27” monitor for video editing. Can’t do that very well on a tablet.
I bought one not long ago. I have a “workstation” laptop, but when it heats up, it also slows down.
Hard to get some peripherals into a laptop, my desktop has a fiber optic IO card, a 12 channel AtoD acquisition system, a GPIB interface, and two Firewire ports. I swap in and out a couple of sound cards, depending on what I’m doing (a sound card is also a data acquisition system).
It runs faster and cooler than the laptop, and has a bit more memory.
I have a little closet that's converted into a computer room/office.
I have a desk with bobble heads, a pic of Mitt and Ann, Russian nesting dolls, a jeweled snail, a (gasp) land phone, a felt pelican, photo stills of Flash Gordon and Dale Arden in action....and my clumsy computer tower, no longer in style.
This is my own little old-fashioned gal-cave.
Stop in to visit with both me and Ming the Merciless for a cup of coffee and a slice of Martha Washington's Own Creme Cake, LOL.
I did for my wife. A mini-tower from HP is in the order of $300. It does what she wants with a big screen...:^)
I can not afford to buy anything now that I do not NEED.
My very old Sony Vaio still works for what I do, so I
will use it until it dies.
I used to use a tower, but in recent years a laptop has enough memory and stuff so you don’t really need one for most of the things I do. So I use a laptop, although I usually keep it on my desk.
On the other hand, I touch type, and I do NOT want to use any computer that doesn’t have a decent keyboard. I hope that they will modify Windows 8 so it will be usable with a keyboard without doing all sorts of fiddling with it first.
I suspect that probably computer makers like Dell will provide whatever is needed to give you that option on their laptops. I do NOT have much use for an iPad, which is hard to write on and hard for my eyes to read large texts.
I haven’t bought a tower computer in years. I buy the individual components and build my own computers.
They’re still the way to go for servers and hard-core gaming and multimedia, but for everything else a laptop does just as well and is comparable price-wise.
I used to enjoy building gaming rigs in tower cases. Big tower cases have gone the way of carbonated cars.
I can afford it, but there’s no compelling reason to replace my 5 year old (maybe even 6) PC, it works, it’s starting to feel a little slow but not much, there’s nothing I want it to do that it can’t. Maybe this time next year I’ll starting thinking about it, which means probably another year after that, unless it actually dies. Not like in the old days, back then I’d do a major upgrade of components in 18 months to 2 years after purchase, and total replacement that same window later. Some of that’s me, I’m not as interested in the bleeding edge as I used to be, but some of it is the industry too, the bleeding edge doesn’t bleed as much as it used to. Used to be there was a noticeable difference in performance of PCs more than 6 months apart in age, now it takes 2 or 3 years for a person to say “yup this one’s faster”.
I’ll probably need a newer one within the next year or so.
I have a Dell i3 tower with a video card needed by the Pinnacle and Avid packages.
For the most part, I do simple cuts and tweaking for stock footage and the once in a while youtube package. I may try to upgrade to a 7 later this year around Christmas time depending on the deals.
Yes, for 3-D workstations, ftp servers, etc. Laptops are more useful for ordinary work on the go. A desktop will last me about 7 years before I think about upgrading, but I’ll literally wear out a laptop every 12 months.
I bought one a few months ago. I prefer the box that accomodates all sorts of add-on’s. It also is connected to our main tv and stereo. I sometimes use the wireless mouse and the large home theater screen.
But my wife likes her laptop.
I bought one six months ago custom-assembled from CyberpowerPC (Intel i5-2550k processor, 8 GB RAM, 1 TB hard drive). We’re probably going to get my wife a replacement for her machine around the end of the year because the one she’s got is one I built for her 4 1/2 years ago and she could stand an upgrade. We both PC game quite a bit so we need to keep our machines fairly current.
At the same time, we also have a decent three-year-old gaming laptop we got from free courtesy of her dad (he didn’t need it anymore) that she uses while she’s working on making jewelry. She also has a Nook Tablet that almost never leaves her side, except when our 6-year-old wants to play some games on it. And we both have Android smartphones.
a “tower” is the only computer, including video cards, etc, that can handle Catia V6 and 3D VIA.
The video card requirements for these programmes is too strong for a laptop.
I will probably be buying a tower within the next year or so, just have to save up the money and everyone knows how that goes these days. This computer is winding down and cannot keep up with the media-photos, videos, sound, etc. One concern I have is everything transferring over.
I have no intention of ever purchasing a carry-around computer smaller than a laptop-they are difficult to read and I tend to lose stuff. Heck I cannot keep track of my cell phone half the time. Way prefer the desk top and large monitor.
My Pinnacle 15 works great on my i7 quad core for editing HD. No problems with it like you read about on forums on the web. The complainers are just using underpowered computers. Download to YouTube, make Blu-Ray discs, etc., no problem.
I did, got a quad core with a upper end graphics card and a 2 tb drive last year. Its more of a server, but I bought it to test out multicore programming and server stuff.
My previous three coputere were laptops, but I have diverged into a server, and a smartphone.
I assembled a high end tower computer(win 7-64) strictly for gaming. For everything else I use a MacBook.
Yes. For gaming. Consoles aren't there yet, but I wish they would hurry up. I know MS needs to make money and to do that they need to make new product, but I'm getting tired of having to upgrade to a new OS, while the old one still works fine, just to run the latest in gaming.
I'm still running XP cuz' the game I mostly play, RACE07, runs on it, but the new one coming out only runs on Vista or higher.
Consoles are only a few hundred bucks and you never have to upgrade them and you can access the web with them. A $20 USB KB and a $20 USB mouse, Google docs and gmail, and you're on the internet doing what most people do with a $500 PC + a monitor. A 2006 XBOX 360 will run today's game, but a 2006 2.2Gh dual-core will not. Go figure.
Oh well, I'll soon move my old PC to server status and replace it as my gaming rig with a new one costing around a grand or so, which will probably only be good for about 4 years till games require more power, RAM and video than that PC is capable of. Such is the world of gaming!
Yep, they are the more powerful than any hand held device out there.
Same here. I even have a WebTV set connected to the TV in the living room. I guess I'm a hoarder.
Flight Simulator user here. I use FSX, FS9, I have X-Plane but don’t use it much. These softwares need high speed CPU’s, and high-end GPU’s. I’m still running my AMD quad core 2.5, but it’s getting long in the tooth. I bought it refurbished.
My son has a cheap walmart emachine that we have decided isn’t up to the gaming he wants to do, so when I upgrade my flight sim rig, my old one gets passed down, his gets passed down to my daughter, etc. We have a pile of old hardware around here also, most works, some just barely, but I’m too lazy to have a yard sale.
True, but full size rack mount cases for generic form factor boards are readily available. I've never seen anyone wear one out....
It's my parents fault. They wouldn't buy me a computer for my room when I wuz a kid. Nor did they let me connect to the pipes of the Internets.
Deprived, I wuz.
While my kids were going to college and grad school, I built a tower a year to keep them more or less up to speed. Now I haven't built a tower in ~3years, but am feeling the itch.
Sure, but do you have the original CoCo-3? Is your Commie-64 still in perfect working order, and when's the last time you powered it up to check?
Yes. Some of us prefer desktops for real work.
My wife is trying hard to get us to buy one for family photos and videos. I on the other hand would just rather buy a laptop or MacBook. Desktops are dead to me.
Yes, most of this depends on what you need. If you need the CPU power for whatever application you are using, then usually a desktop is still the only way to go.
My wife insists on having a desktop, as she finds laptop gaming unacceptable. She only uses the laptop for travel, etc. I have an i7 laptop with a SSD but I still use a desktop with a nice 24” IPS monitor an i7 CPU for video editing & encoding.
I can speak from experience when I say that PC hardware refresh cycles get extended when money is tight. Businesses judge that a four-year-old PC is good enough for now, so they aren't going to replace it yet. Besides, most businesses are ignoring Win8 just like they did Vista.
We've seen this same kind of market softness before, and a good economy always brings demand back. Tablets are part of the equation, but there aren't many users who are actually replacing a desktop with one.
LOL you sound like me. While my office has a new i7 gaming rig and I have a laptop and tablet for work, my attic could double as a Desktop PC museum. I have everything I have ever had, beginning with a Commodore 64, 128, Trash 80, Amiga 500, Zenith, and on through all the desktop itterations from 8088 through current.
Two weeks ago I removed the disks from and recycled 7 towers. I still have 3 or 4 towers because I can't completely break from towers. I'll probably always have a tower system for something.
I think that's a large part of it. Another aspect is that more and more folks who only use computers for web and email are going to tablets and smartphones instead of desktops and laptops. "Pro" users still need full-fledged computers, but "content consumers" are going with lighter weight options.
I used to have a phone number that ended in 8087 and I thought that was cool but none of my friends really got it.
Sure. I have both desktops and a couple of laptops - different tools for different purposes.
For me it's all about i/o: the full-size keyboard, custom mouse, and large-screen displays I have on my workstations. I spend a LOT of time at a computer and so even a small difference in usability makes a huge difference in stamina.
Superior graphics from large, dedicated cards is another reason, and so is the ability to swap new gadgets in and out. Not everybody has those requirements, and if an iPad matches theirs I say more power to 'em. I have a tiny Netbook specifically for travel - there the advantage of portability justifies the extra effort in i/o. Tools for jobs.
You got enough electricity to drive that ....no brown outs ever?
For the most part, Avid works pretty well on my i3. 90% of what I do most of it isn’t necessary. The correction and adjustment tools work rather well. I played with Premiere but wasn’t in love with it. If I ever get another mac, I will try out Final Cut.
The bulk of what video and editing I do go to the two stock agencies I deal with. Every now and then I make a few bucks. It is a good feeling when someone out there (no idea) buys something I made.
I have some ideas for something for Youtube ads that might generate a few bucks or go absolutely nowhere. Finding good model talent in the midlands of SC is not easy. Too many freaks, wackos, nuts, crazies, immatures, and chubbies. Too many here do CL and other stuff for TFP, I offer paying gigs that can be negoitated and what I have in mind is G/PG rated for the most part.
Other stuff is in Smugmug.
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