Is The PC Really A Dead Parrot?

Last week’s article by Joe Wilcox over at Betanews set the cat amongst the parrots pigeons. The article was titled “The PC is a dead parrot” – evoking memories of the classic Monthy Python sketch. Only not as funny.

[PC in this context applies to desktops and laptops – as opposed to the ‘post PC’ era of tablets and smartphones]

Joe’s view about the demise of PCs is based on statistics – 2nd quarter PC shipments were flat globally and down by up to 10% in the US – “the PC market suffered through its seventh consecutive quarter of flat to single-digit growth”.

However, that should not be such a surprise – most of the world is still in the middle of a global slowdown (if not actual recession) and the US has been particularly hard hit. It is perhaps more surprising that the PC market is in fact so resilient – there are many industries that would love ‘only’ single figure growth in the current economic climate.

Joe notes that “Perhaps it’s time someone admitted that smartphones and tablets sap PC sales”. Rather like a mobile evangelist he seems too keen to set mobile devices against PCs…

As a PC merchant of doom, Joe does have form – a year ago saw his article “The PC Era Is Over” – pretty much the same article with equally bald statements such as “the PC’s decline is inevitable”. In the year since, PC demand has remained stable and well over 300 million new PCs have been shipped…

I take issue with the idea that the fast rise of mobile devices must inevitably lead to a precipitous decline in PCs – that the only choice is one or the other. There are too many other factors to explain the slower recent growth of PCs – you can’t assume PCs are going the way of the dodo simply because mobile device ownership is growing so fast:

parrot

Game Over Mr Parrot?

1. Market Over-saturation

In the past, people bought a PC for several reasons – they (or a family member) didn’t have one or to add a laptop or to upgrade.

Now multiple PC ownership has become the norm in many households (at least in richer countries like the US). When a market is that over-saturated there is only one reason left to buy another – to upgrade.

Which explains why “The personal computer still breathes in emerging markets” [which do not yet have multiple PC ownership].

By contrast, the tablet market still has a long way to go to reach the same levels of saturation.

2. Market Maturity

Another reason why PC shipments are not rising as they once did is the maturity of the PC market – by which I mean Windows PCs (92% market share).

Windows XP and Windows 7 are both stable and popular, component lifetimes are typically 5 years and recent hardware improvements offer diminishing returns e.g. hard drive storage may have advanced into Terabytes but that is well beyond the needs of the average user.

Put simply there is no compelling reason to upgrade at as fast a pace – for most people a 2 year old Windows 7 PC is just as relevant and usable now as it was new.

The smartphone/tablet market is relatively immature and so has more room to innovate – put a 2 year old iPad 1 next to the new iPad and there are many compelling reasons to upgrade.

To put it bluntly, the original iPad looks a bit rubbish compared to its sexier new rival whereas a PC of the same era is still a pretty good PC.

3. Spending Power

The article notes research that “Consumers are less interested in spending on PCs as [they] are other technology product and services, such as the latest smartphones and media tablets that they are purchasing”.

This could just be a result of consumers having less discretionary income – instead of replacing an aging fourth PC and buying an iPad, they may now have to choose just one or the other.

If you have 3 other PCs but no iPad the choice is pretty easy.

Decreased spending power may also account for a slowdown in PC sales growth but it does not mean that consumers are choosing a smartphone or tablet instead of a primary PC – and that therefore the PC is dead.

To claim otherwise suggests that consumers see mobile devices as a direct replacement for, rather than addition to, even a primary PC. In my own experience as the owner of a computer business that just isn’t the case.

Conclusion

Over saturation, market maturity and a tough economic climate were always going to slow down the rate of PC growth, regardless of the rise in mobile devices.

Mobile devices may sap PC sales to some extent, especially for second/third PCs, but it’s a long and unrealistic step from that to the death of PCs.

The one caveat I have is Windows 8 – especially Microsoft’s proposed Surface tablet.

If it’s a success (and OEM clones proliferate) the lines between a PC and mobile devices may blur irretrievably – with a keyboard and desktop W8 Pro OS, what exactly is the difference between it and a PC e.g. a W8 touch screen equipped netbook/ultrabook?