The Real Cause of the Worldwide PC Sales Slowdown?
April 15th, 2018Are we really and truly in the twilight of the PC era? Is it true that most personal computing is moving towards mobile platforms — smartphones and tablets? Will the PC become the pickup truck, as Steve Jobs once claimed, and thus needed by fewer people?
Now those of you who follow the auto industry in the U.S. will notice that more people are buying larger vehicles, such as SUVs and trucks, and sedans are not doing so well. So maybe things are moving in reverse?
As a practical matter, I suspect most computing chores by regular people are done on their smartphones. The popularity of phablets, models with displays of over five inches, cements it. It also seems that the larger portion of email I receive these days are composed on mobile gear. I gather that from the telltale message below one’s signature indicating which mobile device they were composed on. Well, assuming a Samsung user isn’t putting iPhone there to fool people.
But that doesn’t at all mean that traditional PCs have fallen into disuse. Most businesses I visit still use them, still mostly Windows models, although Macs are doing better. Even the companies that gather data from their customers, such as medical and legal offices, are relying on regular computers for heavy lifting.
Take my wife’s eye doctor. As a corneal transplant patient, she needs to have her eyes checked at least once a year to make sure she isn’t suffering from tissue rejection. Yes, even on corneas. The medical practice had opened a new office nearer to what is now our former home. When we visited them, she was handed an iPad to collect the basic information. However, the rest of the computing functions for this practice are managed by a Windows PC.
That shouldn’t seem at all strange. The vast majority of iPhone and iPad owners use Windows. You’ll see that in broad strokes as we take a brief look at PC sales.
So here is the situation: There’s supposedly a worldwide PC sales slowdown, but Mac sales rose slightly during the March quarter. The company, once almost invisible compared to everyone else, now occupies the number four spot.
Let’s look at the way Gartner evaluated the global market. But understand these are only estimates. Gartner and also IDC are typically prone to undercounting Apple, but not always, such as the December 2017 quarter that turned from a possible uptick in sales to a downturn.
Still with me?
So worldwide market share for the March quarter totaled 6.9%, a tad higher than last year’s total of 6.7%. At least it’s higher. Gartner’s total was estimated at 4.26 million, as compared to 4.2 million in the year ago quarter.
But Macs were not the fastest growing PCs. Of the top five, Dell had the fastest growth, 6.5%, which put it in third place behind HP and Lenovo. The sales numbers, however, were severely weighed down by Asus, with a drop of 12.5%, and Acer Group, with a decrease of 8.6%. These two turned what was otherwise an increase into a decrease. So when industry analysts argue about the state of PC sales, it’s mostly about the results from two manufacturers.
But it still means sales of PCs have decreased slightly.
Now let’s look at how Gartner and IDC interpreted sales in the U.S.A.
In this country, Dell fared better according to Gartner, leading the market with 3.44 shipments. HP had 3.35 million.
IDC had its own set of numbers. They weren’t quite the same, but close enough not to represent a meaningful difference. But remember they are estimates. More often than not, Apple is undercounted, but not always. In the year-ago quarter, for example, Gartner’s numbers were a tad higher than Apple’s, a comparison of 4.217 million Macs compared to the actual numbers totaling 4.199 million.
As surveys go this is pretty close. There are no dire conspiracy theories to explain the disparity other than the errors you’d expect from surveys that are almost always imperfect to some degree.
What it does show is that, in a down market, Apple is keeping up, as are HP, Dell and Lenovo. It may be in fact, that these four are prospering, more or less, because they offer quality gear at reasonable prices. What’s more, since regular PCs are often indistinguishable from one another, it’s understandable that customers may choose gear on the basis of other criteria, such as service and support.
Right now, Mac sales are doing all right. But if Apple sees a near-term future where the Mac must become less of a traditional PC in a fancy dress, maybe that’s when it’ll switch wholesale to ARM processors. Indeed a major consideration in keeping the status quo may well be that lots of Mac users also want to be able to run Windows with good performance. That will be highly questionable if Apple goes ARM, unless they invent a miracle method to emulate Intel with only a minor performance loss.
The speed with which PC sales decrease going forward may well tell the tale.
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Something else is going on. For some time now, the desktop computer — be it made by Apple, Dell or anybody else — has become a mature, stabilized product. Time was when the passage of a very few years was capable of producing a dramatic difference, one that created genuine consumer excitement, regarding such basic things as speed and power. Those days are gone forever. Your modern desktop can gracefully handle just about anything an average user is likely to throw at it, there’s not much about the ones corrently available to create consumer dissatisfaction. And desktop computers are sturdy things: physically, they don’t wear out quickly.
This means that the old notion of the three-year replacement cycle once accepted as the norm by many organizations and individuals no longer makes an iota of sense. Both organizations and individuals are now apt to hang on to their current desktop gear much longer than once was the case. Which must have a huge effect on purchasing habits. Which in turn must have an equally huge impact on sales figures.
So I have a strong hunch that’s what’s going on here: alterations in purchasing habits are to a large extent creating an optical illusion of the decreasing use of desktops. And I’ll venture to make a prediction: as other electronic devices (most notably the smart phone) arrive at their maturity and manufacturers start running out of ways to make them significantly better, we’ll see the same thing happening there: the user base will learn to accept a longer replacement cycle, which will lead to decreased sales and similar optical illusions, and so armchair pundits will start writing the obituary of those products too.