Common Sense, Future Tense: PC Sales Crawl

Tanking: Traditional desktops and laptops, both Windows and Macs, are failing to hit sales targets.

Tanking: Traditional desktops and laptops, both Windows and Macs, are failing to hit sales targets.

Personal computer sales are limping along. These include both Windows and Macs. Manufacturers affected range from Lenovo, HP, Dell and even Apple. There’s a reason why Apple doesn’t push sales figures of its Macs. It is tanking just like every other PC. Why?

Sensationalists will have you believe that we are in a ‘Post-PC’ world and that tablets and phones are now main devices. That is ridiculous. Phones and tablets have come a long way but are very far from replacing desktops and laptops. Yours truly dabbles a lot in mobile computing. I like things to be small, light and still fully capable. There’s nothing like that in the market currently. Tablets from Apple and Android manufacturers are very far away from being able to do what laptops can. Phones are even further away. Yes, you can surf the net, check email and play some casual simplistic games. But that is all.

If you want to get any work done, you’re going to head for your desktop or laptop. When I talk about work here, I’m talking about any form of work that you have to submit or display. Not the notes and scraps of writing you do on your mobile device.

 

Saying that we have already moved into a ‘Post-PC’ world is a load of bull. We will eventually get there but not for a couple more years.

 

Saying that we have already moved into a ‘Post-PC’ world is a load of bull. We will eventually get there but not for a couple more years. PCs are no longer the hot new things but we are very far away from leaving the PC behind. Here are the real reasons why PC sales are slowing down.

 

Good Enough

Nehalem - Nearly 3 years old yet still more than good enough.

Nehalem – Nearly 3 years old yet still more than good enough.

If you’ve bought a computer in the past 2-3 years,  you don’t need to upgrade. Ever since Intel hit its first generation Core i5 / i7 chips, there has been only minor improvements in Sandy and Ivy Bridge. I’m still on the first generation Nehalem processors and I have zero reasons to upgrade. This is telling as I am an enthusiast and I do handle heavy CPU production work.

Newer versions of software are not bottle necked by current CPU performances. In fact, Nehalems are still overkill for most applications. Games are the ones pushing performance yet 90% of the games out there in the market are not CPU intensive. They push only graphical boundaries and so the only component you need to upgrade is the graphic card.

 

Windows

90% of the world’s desktops and laptops run Windows. Many Macs also run Windows. Windows 7 is another reason for not needing a better machine. Windows 7 came after Vista. From XP to Vista, you definitely needed a new machine. Vista was power hungry, resource intensive and your good ol’ XP machine would never hold a candle to Vista’s needs. So everyone was forced to upgrade. Some clung onto XP dearly but most moved into the hell that Vista was. So, from 2006 to 2008, plenty of new PCs were bought. Sales went well.

And then, Windows 7 came. Windows 7 is the best ever operating system released by Microsoft and this is down to only one reason. Windows 7 is a fine tuned Vista. The mistakes made with Vista were properly addressed and what you got with 7 was what Vista should have been. In doing so, Windows 7 actually ran better on lower end hardware than Vista would. What this translated is that your Windows Vista PC is good enough for Windows 7. From an operating system perspective, there has never been a need to upgrade your PC after Vista launched. Without a need to upgrade, PC sales gradually declined till present .

 

Windows 8 will actually run even lighter than Windows 7. There’s still absolutely no reason to upgrade or buy a new PC.

 

Windows 8: Built for a new form factor not traditional PCs.

Windows 8: Built for a new form factor not traditional PCs.

Will Windows 8 change things? No. Windows 8 will actually run even lighter than Windows 7. There’s still absolutely no reason to upgrade your hardware or buy a new PC on a performance basis. Microsoft’s move to make its operating systems lighter and more resource efficient is great for consumers but bad news for PC manufacturers. Users simply have no need of a more powerful machine.

Windows 8 is also Microsoft’s move into the mobile space. As such, what you may end up replacing is your laptop. I am considering that option because Windows 8’s real selling point is the new form factor: laptop-tablet hybrids. Windows 8 hybrids are just like Asus’ Android based Transformer tablet with a dock except that Windows is a far more advanced operating system with a massive list of compatible productivity-grade software. You get the best of both worlds moving from a laptop to a Windows 8 hybrid. But there’s nearly nothing in Windows 8 that makes it an exciting proposition for desktops. In fact, I am planning to stay on Windows 7 on my desktop.

Windows 8 will launch a new form factor but you won’t need a new desktop for that.

 

Consumer Dollar Competition

In economics, nearly everything is a zero sum game. Consumers no longer need to spend $1,000 to $2,000 for a new PC every few years. That portion of the budget has moved directly to the mobile space and with good reasons. Phones and tablets are growing quickly because they are still far from being good enough. As mentioned earlier, tablets and phones are just not ready to compete with the production capabilities of a traditional laptop and desktop.

 

Phones and tablets are growing quickly because they are still far from being good enough. You have to keep upgrading.

 

Samsung’s Galaxy Note II is the very first mobile device on the market that features side by side applications. Microsoft’s Windows 8 will offer the same late this month on Windows tablets. Apple’s high resolution iPads don’t even do that now despite boasting one of the most heavyweight processors in the market. It took the mobile market 5 years to reach this infant stage and it will possibly take them even longer to get to where full fledged operating systems are.

Samsung's Galaxy Note II is the only smartphone with true dual window multi tasking.

Samsung’s Galaxy Note II is the only smartphone with true dual window multi tasking.

This points to just one thing. The mobile space is at its growing stage. It’s moving quickly because it can barely spot maturity on the far horizon. Growing sectors dictate where the funds flow. Your old PC works just as well as it did a few years back but the same cannot be said of your phone or tablet. You have to upgrade because you need to.

 

The PC market has matured. Mobile isn’t and that’s why mobile sales are skyrocketing while PCs are stagnating.

 

The point here is simple. The PC market has matured. It has reached a stage of being perfectly capable to deal with anything thrown at it. Mobile isn’t and that’s why mobile sales are skyrocketing while PCs are stagnating. We still need our PCs for the next 5 years but we do not need to buy a new one.

 

Conclusion

We will inevitably move into a Post PC world but we are very far from it currently. Until your tablet or phone can do everything you need on your PC, your mobile gadgetry will continue to be a companion device. PC manufacturers have to move on. There’s no surprise why Lenovo, HP, Dell, etc are diving straight into the new hybrid form factor. The traditional desktop and laptops are not dead but nothing new is coming from that end.

 

There’s no surprise why Lenovo, HP, Dell, etc are diving straight into the new hybrid form factor.

 

 

Predictions

I’ll end with some predictions. It’ll be fun to look back here in 5-7 years time:

  1. Laptops and 10″ tablets will be consumed by the new hybrid category. Microsoft is correctly placing its bets here. Asus’ Android based Transformer series has been the pioneer of this new form factor. Windows will fully exploit this fresh sector in the years to come. This area makes sense because it is better than both current laptops and tablets. A no compromise situation here. Within 3 years I expect hybrids to slip below S$700 making 10″ tablet only devices obsolete. Hybrids will appeal greatly to students and office workers.
  2. Tablets will survive only between the 6 and 9 inch form factors. This is the reason why Apple will produce the iPad mini. This is also why Google’s first Nexus tablet is 7 inches. Android’s and iOS’s battle will be firmly locked in this area. Microsoft doesn’t seem to care about this category. This will be the device for grandmas and granddads, also kids.
  3. Smartphones will stop growing past 5 inches or so. It just doesn’t make sense for your phone to not fit your pocket. Samsung’s Galaxy Note series will remain the biggest possible phone in this category. Phones will typically be between 4″ to 5″ large. Android and iOS will be the big players. Windows Phone hopes will be based on its popularity on hybrids and desktops. I find it hard to put faith in BlackBerry at this point. The phone will have little space to innovate besides replacing your wallet (cash, cards, etc). The main portion of innovation will be found in linking up with Google Glasses and new types of Bluetooth watches or headsets.
  4. Desktops will no longer be required for most families, hybrids will be more than sufficient. Nevertheless, content producers will still require desktops. The tail end of this stage will finally signal the beginning of the Post PC era.


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