April 18, 2013

The PC is Dead! Long Live Personal Computing!

#technology #tech evolution #mobile

Following a record decline in sales, recent headlines have proclaimed the death of PC. We have entered, some say, what the late Apple CEO Steve Jobs, dubbed a “Post-PC era”. But a requiem for the PC is premature. For all the trouble the PC market is seeing, personal computing is experiencing a golden, albeit mobile, era.

Sharp Downward Trend

PC is the abbreviation for personal computer. The term PC is synonymous with desktop computers and laptops, but it actually applies more broadly. Devices like smartphones and tablets are also personal computing devices. But the rise of these more portable and more affordable computing devices has come at the expense of the venerable desktop PC and even traditional laptops.

In the first three months of 2013, the PC market has seen its steepest quarterly decline ever — 13.9 percent, according to a report from market research firm International Data Corp (IDC). These figures followed a Gartner report predicting contraction of PC market by as much as 3.5 percent over 2013, as consumer preference shifts to ultra-light notebooks and tablets.

The downward trend does not end there. The market share of desktop and portable PCs dropped by 4.1 and 3.4 percent, respectively. Worldwide tablet shipments are expected to overtake desktop PCs in 2013 and laptops will suffer the same fate one year later, according to IDC. Meanwhile, global tablet shipments grew by 78.4 percent in 2012 that compared to the year previous.

Shifting Behaviour

Things are not expected to get better. IDC also predicts the desktop market will drop another 4.3 percent in 2013, while laptops are expected to stay relatively flat at a growth rate of just 0.9 percent.

It is not simply that users are abandoning PC use altogether. Rather, they no longer have the same incentive to use PCs as often or replace them as frequently as they once did. What’s changed? In a word - mobile.

Tablets such as Apple’s wildly popular iPad; and smartphones like Apple’s iPhone and Samsung’s Galaxy phones, are becoming the center of the personal computing universe.

It has not helped that PCs usually cost more than smartphones and tablets, and are not as convenient to use. PCs typically sell for US$500 to US$2,000. By contrast, tablets sell for US$200 to US$700, while the initial out-of-pocket expense for a smartphone can be as low as US$99.

Microsoft, Victim or Villain

In this new world order, Microsoft’s once ubiquitous Windows operating system is not quite the force it once was. Apple’s iOS and Google’s Android operating systems dominate the new, mobile landscape. Some analysts pin blame on Microsoft for the suddenness of the decline of the PC market. The software giant badly miscalculated the shifting tide. Its Windows tablets, much like its smartphones, have not had any significant impact in the marketplace.

Now, figures from both IDC and Gartner also confirm that its Microsoft’s new operating system, Windows 8, has not captured the interests of consumers. When Windows 8 was launched last October, Microsoft hoped the operating system, with its new touch-based interface, would help the flagging PC market better compete against tablets. Instead, PC sales have declined faster and the outlook show no signs of improving.

Bob O'Donnell, IDC Program Vice President, Clients and Displays, stated, “At this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market.”

He added, "While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the UI, removal of the familiar Start button, and the costs associated with touch have made PCs a less attractive alternative to dedicated tablets and other competitive devices."

So, faced by more nimble competitors, Microsoft’s products just do not have the same appeal in the enterprise, or amongst consumers. And the competition is expected to grow even fiercer as consumers the world over embrace mobile computing.

Game of Thrones

It is not necessarily that users are dropping PC use altogether. Instead, users are meeting their computing needs in new ways. So as tablets and mobile phones take centre stage, corporate users as well as general consumers have less incentive to upgrade their desktop computers.

But falling market percentages tell only part of the tale. Looking ahead, IDC’s numbers suggest that while the overall market share for PCs will decline, shipments will actually increase, if only marginally. Translation, demand for PCs is not disappearing, it is just that the appetite for mobile devices is rising at a phenomenal pace. Devices with physical keyboards, large screens and processing muscle will continue to have a significant place in the computing landscape. It’s just not likely to be the top spot.

So as the era of desk-bound computing wanes, the mantle of power is passing to mobile computing. The power shift is creating new opportunities and fuelling new tensions across industries. One thing is certain – the PC isn’t dead, it is just evolving. And with its evolution, personal computing is becoming more mobile, and more personal than ever before.