PC Market Hasn't Hit Rock Bottom Yet

PCs are in even worse shape than expected, says IDC, but that's not necessarily bad news for Windows 8.

Michael Endler, Associate Editor, InformationWeek.com

May 28, 2013

4 Min Read

Tablet Buying Demystified: 10 Tips

Tablet Buying Demystified: 10 Tips

(click image for larger view and for slideshow)
Tablet Buying Demystified: 10 Tips

IDC reported Tuesday that the PC market, already known to be hemorrhaging cash at a historic rate, is bleeding even more profusely than previously thought. The research firm said consumer preference for tablets has accelerated the damage, noting that the upstart devices are on pace to outsell laptops by the end of this year.

The new data reinforces that the "post-PC" era is no longer theoretical, and that though traditional desktops and laptops will continue to have a place, tablets and other mobile devices can no longer be dismissed as consumer distractions.

In a statement, IDC announced it now projects PCs will decline 7.8% in 2013, far more severe than the 1.3% drop the firm had previously forecast. IDC expects the decline to continue through at least 2014, after which the market might begin to rebound. Even then, the recovery will be modest; the firm estimates that 333 million units will ship in 2017, well below 2012's notoriously low 349 million.

IDC's data suggests laptops will drive any future PC growth, which will occur mostly in emerging markets. Desktop shipments are expected to decline in all regions for the foreseeable future.

[ Has Windows 8 left you fuming? See 8 Things Microsoft Should Fix In Windows Blue. ]

The newest predictions are the latest in a year-long string of increasingly bleak revisions. Last June, IDC expected worldwide PC shipments to total 413.6 units in 2013. That estimate dropped to 391.1 million in August, though the firm still projected modest growth through 2016. By March of this year, brutal back-to-school and holiday seasons had combined to push 2013 estimates even lower, to 345.8 million units.

In April, it became clear that Q1 PC shipments were even worse than expected, setting the stage for IDC's newest prognostications.

The takeaway? PCs aren't dead, but they'll never be as central to most of our lives as they used to be. In a press release announcing the new prediction, IDC VP Loren Loverde stated that most common computing needs -- Web surfing, social media, email, apps -- don't require a lot of processing power or local storage, and that consumers have embraced mobility as a result.

Indeed, in a separate statement, IDC announced Tuesday that it expects tablet shipments to reach 229.3 million units in 2013, a 58.7% increase from last year's 114.5 million. That total would make tablets more popular than either new laptops or desktops are when considered as standalone categories, though not when taken together. By 2015, however, IDC anticipates tablet sales will outnumber the combined sales of all traditional PCs.

Ryan Reith, program manager for IDC's Mobility Trackers, noted in a press release that "PCs will have an important role" but that "a tablet is a simple and elegant solution for core use cases that were previously addressed by the PC."

IDC noted that smaller tablets such as the iPad Mini are becoming more popular. The research firm expects sub-8-inch screens will account for 55% of tablet shipments this year. Larger tablets, a more recent development, could be less impactful, with perhaps only 2% of overall sales.

Significantly, the firm also said that tablet prices will drop 11% this year, to $381, and that PC prices will average $635. Given the disparity, it's easy to see why consumers are choosing tablets. PCs might be more powerful, but they charge a hefty premium for their extra muscle. For a lot of users, especially those with aging-but-functional PCs at home, it makes more sense to buy a cheap, new tablet.

As long as professionals continue writing code, typing reports, using spreadsheets and running software like Photoshop or AutoCAD, businesses and institutions will continue to invest in PCs. But even in verticals that rely on legacy software, tablets have begun to cannibalize traditional machines.

Some schools and universities, for example, have begun to embrace Windows 8-based tablets as laptop replacements, accepting the OS's much-lamented learning curve because the devices combine x86 applications and tablet-style mobility in one slick package. The devices might feature tradeoffs relative to traditional machines, but they've become too functional and economical for certain customers to ignore.

This budget-minded approach won't be right for everyone, but it's somewhat ironic that Windows 8, the OS some blamed for the PC's misfortune, is primed, pending what's included in Windows 8.1, to push tablet sales in new directions.

That, more than anything, is the point the new data reasserts: users have more computing devices to choose from than ever before, and as the new entrants prove their worth, it's natural that no single device will enjoy the virtual monopoly once enjoyed by conventional PCs.

About the Author(s)

Michael Endler

Associate Editor, InformationWeek.com

Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 and, pending the completion of a long-gestating thesis, will hold an MA in Cinema Studies from San Francisco State.

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