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The Decline of the PC Market

Anybody who has been paying attention to the technology field has heard echoes of the looming decline of PC sales. Now, that prediction has not only come to fruition, but it is much worse than many have previously imagined. In 2012, both the IDC (International Data Corporation) and the Gartner Group reported that global PC

b2ap3_thumbnail_decline_of_the_pc_market_400Anybody who has been paying attention to the technology field has heard echoes of the looming decline of PC sales. Now, that prediction has not only come to fruition, but it is much worse than many have previously imagined. In 2012, both the IDC (International Data Corporation) and the Gartner Group reported that global PC shipments in the 3rd quarter had fallen 8% from the previous year. The latest numbers released on December 2nd, 2013 were not good news for the world of traditional desktop and laptop computers.

IDC dropped the bombshell that the PC market would be taking its largest hit of all time this year by declaring it “by far the most severe yearly contraction on record”. It states that the PC market is set to plunge an additional 10% overall this year with consumer sales declining by 15%. They predict 314.8 million global PC sales, similar to 2008. In retrospect, 2012 sales were at 349.4 million, a decline of around 35 million sales. They say this trend will continue, with a fall of another 3.8% in 2014. The research group, Gartner, makes a slightly less devastating prediction, stating 2014 sales will be flat, but could be followed by a single digit increase in the following years.

Mikako Kitagawa, the principal research analyst at Gartner states, “Definitely not a decline”, in regard to PC sales in 2014. However, she added, “We think that 2013 will see the worst decline in PC history. …The PC used to be the only device to connect to the Internet. Now there are many choices, and last year and this year have seen structural changes because of tablets and other mobile devices.” CNET Editor-in-Chief, Paul Sloan, compares the situation to newspaper subscriptions; “They’re just going to keep going down. Mobile is growing; tablets are growing.”

PCs still dominate most homes, as illustrated by Ovum’s Consumer Insights survey, which states that 68 percent of post-Thanksgiving Cyber Monday shoppers relied on their desktop/laptop PCs to make online purchases. This figure shows how mobile devices already account for almost a third of online purchases, and also, the average user isn’t in need of a new PC, the one they have now works just fine. Jay Chou of IDC states “…PC usage has not moved significantly beyond consumption and productivity tasks to differentiate PCs from other devices. As a result, PC lifespans continue to increase, thereby limiting market growth.” Principal analyst at Technology Business Research, Zra Gottheil, agrees, “Basically people are keeping their PCs longer.”

Another startling number that backs up this analysis is the December 3rd report from IC Insights which predicts that, for the first time ever, global cellphone sales will overtake the sales of desktops and laptops combined this year! It’s predicted that cellphones will outsell stationary computers by almost $40 billion, with cell sales at $247.2 billion and PC’s at $208.3 billion. This means trouble for traditional companies like Intel who have had struggling sales numbers, and HP who have already downsized by tens of thousands of workers. However, these are the types of numbers that Google and Apple are currently seeing great benefits from.

The reality is that in some professions you wouldn’t be able to get much done if you only had a mobile device. This fact will keep the PC relevant for the time being. It may be true that the one you bought four years ago still works just fine and does everything you need it to do; word processing, email, print design, etc. However, new PC technology allows for faster computing and better security than antiquated machines. The introduction of lighter, more powerful, and more versatile tablets will make it difficult for the PC to ever be a viable platform for consumption again, but for productivity, you can’t match it with a tablet in today’s market.

What do you think? Is the PC on its way out of the technology market? Let us know in the comments.

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