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7/11/2013
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Desktop PCs: Do They Have A Future?

Gartner says PC sales have declined for the fifth consecutive quarter in Q2. But the market could turn around faster than many think, says one IT services firm.

Worldwide PC sales dropped by more than 10% in the second quarter, according to Gartner. It was the fifth quarter in a row that PC sales fell, the longest decline in the PC market's history. Some analysts suggest that desktop PCs don't have much of a future.

U.K. services firm Stone Group disagrees, citing many reasons personal computer sales may actually be set for a pickup. "There's no doubt that the ongoing proliferation of tablet and mobile devices is fundamental to the next generation working environment and offers a host of enhanced features and benefits," said CEO Simon Harbridge. But, he argues, there are some things that tablet and mobile devices can't provide -- such as storage capabilities for large amounts of data or high graphics performance for in-house design projects.

There may be other market factors that come into play, too. Historically, many enterprise buyers -- including those in the education sector -- tend to delay upgrades of Microsoft desktop assets until Service Pack 1 (Windows 8.1) is released. Harbridge predicts that the next six months should see a significant turnaround in sales across the board as users finally make the upgrade. On the hardware side, sales could be further bolstered by the latest set of Intel core processors, which should offer better performance and storage at lower costs.

[ For another perspective on the health of the PC market, see 4 Reasons PC Market Won't Rebound. ]

Harbridge also pointed out that starting in October, the U.K. market should start seeing second-generation Windows 8 tablets, which should offer both lower costs and many bug fixes. This, he predicted, could start delivering parity between Windows-based technology and its Apple counterparts.

Of course, growth in the tablet market doesn't translate to a bump in desktop PC sales. But the Stone Group sees an important relationship between tablets and laptops. "The tablet isn't going to kill off the laptop," Daley Robinson, group marketing director, told InformationWeek. Instead, he said, we should see tablets serve as a catalyst, forcing laptops to evolve and "give the kick that the industry needed to bring innovation to a device which has stagnated over the last 15 years with very little change."

What about tablets in business? Tablets today serve primarily as consumption devices, Robinson said, and many businesses buy them as companion devices with more formal business notebooks. "It's only later in the year with the release of better Windows 8 tablets that we will see people using [tablets] for business in a meaningful way. This next generation of tablets will satisfy both consumer and business needs at a reasonable price, which will open the playing field -- and there won't have to be a compromise between business specific features such as security and cost."

Stone also predicts a brighter future for Microsoft's beleaguered Surface tablet: "With the right channel strategy, in 12 to 18 months Surface could be a significant player in the tablet for business market. If Microsoft will invite resellers to the party, we will see Surface gain popularity quickly."

At the same time, technology innovation continues with the introduction of more touch-enabled notebooks with greater accessibility. That might be of particular interest to its core U.K. education market, according to Stone: "While technologies such as Intel's ultrabook have been cost-prohibitive to schools in particular in the past, entry cost will come down, fueling refreshes in the market."

It's worth noting that the Stone Group might itself have a stake in the future of the PC/tablet market: Earlier this month, the company was selected for a third consecutive term as an approved supplier on the U.K.'s National Desktop and Notebook Agreement, a contract to sell desktops and notebooks to British universities. Stone was one of only two U.K.-based manufacturers to be awarded the contract, estimated to be worth £310 million ($469 million).

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Mark532010
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Mark532010,
User Rank: Strategist
7/18/2013 | 5:56:08 PM
re: Desktop PCs: Do They Have A Future?
gotta love analysts. 76 million new desktop pc's were sold in the last quarter, so obviously the desktop no longer has a future.
Server Market Splitsville
Server Market Splitsville
Just because the server market's in the doldrums doesn't mean innovation has ceased. Far from it -- server technology is enjoying the biggest renaissance since the dawn of x86 systems. But the primary driver is now service providers, not enterprises.
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