Can Anything Be Done To Save The Ailing PC Sector?

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Following what was described as the longest decline in history back in the summer, PC shipments are now at a five year low – and it shows no signs of abating, despite the traditionally fruitful festive period impending.

Steve Jobs, sitting on stage at a conference in 2007 with Gates, first raised the idea of a “post-PC” era, a time when the traditional PC would no longer be the centre of a user’s universe. Instead, more mobile, function-specific devices would come into play, and would make computers much more personal than the PC. The proposal of a post-PC era was certainly in the interests of Apple, but the vision would quickly come to fruition with the iPhone kicking a smartphone revolution; one that would also include such vendors as Samsung and HTC, as well as bringing Google’s Android operating system to the fore.

Flash-forward to Christmas 2013 and fewer consumers have a new PC on their wish-list this year?  Gartner research shows the desktop and laptop market in Western Europe is declining even faster than expected and would likely continue to do so. The UK has been hit especially hard, making for particularly grim reading following a brutal 2012. But should this be a surprise?

Well, we can point to frugality as one reason, with consumers and businesses unwilling to trade in and upgrade their current PCs until absolutely necessary (with Windows 8 no doubt having an impact on this decision), but tablets and smartphones are taking huge chunks out of PC market share.

This is evidenced in no clearer detail than the contrasting fortunes of Lenovo and Acer in recent weeks. Lenovo, the world’s biggest PC maker, has been focusing on mobile devices amid a slowing global PC market. The result? A 36% jump in profits. Meanwhile Acer, the world’s fourth largest computer manufacturer and has been hit by further losses.

Ofcom’s Communications Market Report points to how that is playing out in terms of usage. When consumers are active users of smartphones (now at 51% penetration in the UK) and tablets (now double the penetration of 2012 at 24%, 56% of which is iPad), those consumers are swaying away from using desktop PCs and laptops. Our smaller, less expensive and Internet-friendly alternatives are taking over. It’s perhaps too soon for this Christmas now, but brands in this space need to adapt quickly.

With new brands entering the tablet market all the time, trying to grab a slice of the fortunes (Tesco’s Hudl the latest in a long line), it has driven a tremendous level of choice and value to the consumer; enabling it to become a cost-effective option for the vast majority of consumers.

Moreover, the connectedness provided by our smartphones and tablets also mean that we’re using our PCs significantly less. Whether it be shopping, banking, socialising or e-mail, the strain is now spread across three of four devices and with less functions to be relied upon, the PC upgrade more often than not will be bottom of the priority list. With lower usage means a longer product life too.

However, despite the market shrinkage, I believe there is still a place for PCs in people’s lives. But they have to quickly find and define a new purpose. If e-mail, shopping, banking and even TV-streaming are to be handled by tablets, then in addition to the latter, photography, gaming and design can be the new points of emphasis. Likewise, how can manufacturers tailor their offering to their business audience?

The critical issue when looking at the dip in shipments is that the lost unit sales are largely at the lower end of the PC market. Cheap, commodity-spec, throw-away boxes powered by low-end chips have been made obsolete by tablets. Rather than attempting to be as multi-purpose as possible should PC manufacturers look to consolidate function and emphasise value within USPs.

PCs may never regain the market share they once enjoyed, but there is still plenty of space for them to exist in a complementary role —more portable, more energy-efficient and in a range of new form factors. Whether targeting businesses or the consumer, the PC remains an integrated part of the user’s wider digital consumption habits, becoming the hub of your digital life which tablets and smartphones complement as satellite devices.

By Daniel Todaro, MD, Gekko

read the full article at http://www.techbubbles.co.uk/blog/can-anything-be-done-to-save-the-ailing-pc-sector/

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