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The PC market is a horror show right now

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Going into the first quarter of 2013, IDC was projecting a dismal 7.7 percent decline in worldwide PC shipments from the same quarter a year ago. Turns out, they were wrong: the decline of the PC market during the quarter was drastically worse.

The 76.3 million PCs that did ship between January and March this year were down a whopping 14 percent from the same quarter a year ago. It’s leading the analysts at IDC, who have been monitoring the PC market since 1994, to call it “the worst quarter” it’s seen.

And, no, it’s not a blip: it’s the fourth quarter in a row that PC shipments have declined.

The numbers show that people still buy PCs, but not in the quantities of the past. Instead, many people — both businesses and individual consumers — are making the purchase of cheaper, more portable tablets their priority right now.

All the big PC makers are affected. Lenovo, which is the second-largest PC maker by volume, was the only one of the top 5 firms who didn’t see double-digit units sales declines during the quarter — it pulled even with the same quarter a year ago. Not terrible, but certainly not good.

Even Apple, which was able to buck the industry trend of the last year and grow Mac sales until the last quarter of 2012, is seeing its laptop and desktop shipments drop off. IDC doesn’t release global numbers for Apple, but in the U.S. its shipments dropped 7.5 percent from the same quarter a year ago. (However, if you look at data from competing analyst firm Gartner, it shows U.S. Mac shipments on an opposite trajectory during the quarter — up 7.4 percent year over year. The reason for the discrepancy isn’t clear; its PC numbers overall weren’t as far off: down 11 percent versus IDC’s 14 percent.)

What Apple(s AAPL) has going for it is its prescience in seeing this shift to smaller mobile computing coming (and of course helping it along). So when people are opting not to buy a more expensive laptop or desktop, it has the iPad to offer.

Apple competitors in the PC business have been slow to adjust to this new reality. And even for those who are trying to offer a good tablet experience, it’s not going that well. Microsoft’s(s MSFT) attempt to stanch the bleeding with Windows 8 is faring poorly, IDC says:

“At this point, unfortunately, it seems clear that the Windows 8 launch not only didn’t provide a positive boost to the PC market, but appears to have slowed the market,” said Bob O’Donnell, IDC Program Vice President, Clients and Displays. “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 PCs have made PCs a less attractive alternative to dedicated tablets and other competitive devices. Microsoft is going to have to make some very tough decisions moving forward if they want to help reinvigorate the PC market.”

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This post was updated with details from Gartner’s report at 5:11 p.m. PT.

Image courtesy of Flickr user Alyssa L. Miller via Compfight cc

24 Responses to “The PC market is a horror show right now”

  1. joao cesar

    Fake- the turdy tablets are new, so everyone buys one. anyone with half a brain cell will get tired of 16gb of hard drive space in them so they’ll jump onto the next tabletty turd until they can be a fraction as groovy as pcs. pcs meanwhile, last longer than tablets and if something breaks in them more often than not you can just buy a spare part. not so for the turdy apples ipuffs when out of warranty you have to buy a new one. look up any internet browsing engine like statcounter and you’ll see pcs are still at 10%, actually even recovered these past few months. the list of reasons why this article is an orgasmatron of lies continues.

  2. Sheldon

    I owned a small custom PC shop for several years. Microsoft announced a lot of “confusing” news about their future direction. We eventually reached a point where we were at a loss in terms of advising our customers about the best solutions. If we could not decide the best course of action for our customers, it is no surprise that customers could not decide for themselves and that they did not buy anything. After a few months of no sales we closed the store. I think that there are other people that Microsoft “confused out of business”. There will be many I am sure who will choose to criticize me and my staff because we did not know what to recommend, but the lack of commitment by Microsoft to the channel eventually became too strong of a force to resist. Customers would buy PCs, if someone told them compelling reasons why they would want one. Instead everyone “chases their tail” trying to guess what to do.

  3. Tommie-Preston D Reynolds

    This won’t last. There is a serious offset in the potential power of PC hardware, and the widespread need to use it. The PC’s greatest advantage over tablets is its horsepower – but most people just use their computers for word processing, web browsing, and other small applications that are easily implemented on a tablet or phone. On top of that, everyone needs a phone – and a 2 for 1 deal is always good.

    At this time, the only real use for all that computing power is for gaming and professional uses (video/photo editing, 3d rendering), but there will come a time (soon) when a new technology that is coveted by the masses will come, one that will require the power of a PC. My guess is that virtual reality will be that technology, but it could be anything. In general PCs will always be around to run the stuff that tablets and phones cannot.

  4. I cant stand tablets and my 5 year old Win 7 box is running great thank you very much! Hardware quality is better now than it ever was and for most consumers in the 99%, we’re living in a recession/depression climate and are wisely eschewing overpriced computers and tablets alike.

    People who dont have jobs or discretionary income dont buy shiny new over priced tech. Ultimately mobile is sucking up all the dwindling PC money anyway! This is the new PC reality.

  5. The problem with PCs is that they are boring. Except with Office 20xx and now Windows 8, when things people depended upon changed, in some cases a lot, for reasons that escape the average user. Boring plus change (I know, it seems like a contradiction) leaves a lot of people fuming and thinking a new and exciting tablet -which you know, seems to make a lot of people happy- sound like a good idea.

    It does not help that Windows 7 is a really solid product. You cannot follow up a good, solid product with something less. Ford learned this with the Mustang car back in the 60s. The Mustang II was not version 2 of the car. It was something else with the name glued on.

    The way Windows 8 might have succeeded would be to lose the “Windows” name. Afterall, the Windows “folders on a desktop” motif has been gone for years anyway. The branding no longer stands for what the product is or does. On the flip side, Microsoft is absolutely horrid about coming up with good names for things, and even when they have a name like Metro, they retreat from it at the last moment.

    It also does not help that modern PCs and laptops are, for the most part, pretty good, Whatever ran Windows 7 fine probably still does. The current CPU, storage, and memory options are sort of in a sweet spot where new hardware isn’t as needed as it might have once been. Sure, an i5 will work better than a Core2Duo, but for most people, in most applications, the difference is going to be small. New hardware used to fly out the door when it was sorely needed. When it was a huge jump to go from 486 to Pentium II or from that to a Core/Core2 or I series. But today, your Windows 7 I5 is going to be mostly the same as your Windows 8 I5. Hard to sell “well, it’s slightly better -and it has Windows 8!!!” to customers.

    So it makes sense that they’d keep their existing PC and go get something more exciting to use -and not just as a toy. Some people are actually managing to do work on these tablets. In my case, my smartphone and tablet go with me everywhere. My laptop stays home. I don’t miss lugging it.

  6. Anthony Lysenko

    There are several trends contributing to this. One is, mobile devices compete for the same discretionary “technology gadget” dollars with PCs. Additionally, PCs should be separated into desktops and laptops – there are really two different form factors and markets. As tablets and phones became more “fashionable”, consumers spent money on hot ticket items, that’s no surprise that “non-fashionable” category declined.
    Also, PCs are longer lasting, typically not replaced every 2-3 years or whenever your cell contract is up for renewal. Mobile devices are financed differently, in most cases finance charges are spread over accompanying connectivity services contract, whereas PCs are paid upfront. Last, but not least, consider the bad economic times and people going with the cheapest option available (mobile devices). Each one of these trends contributed to loss of PC’s sales market share. What the future holds? It’s difficult to predict. On one hand, mobile devices are still a poor substitute to PCs as they lack the processing and display power. On the other hand, the mobile platform is still being developed and with each new iteration we get more powerful processors, graphics and storage. It may also be that PCs were already oversold in their respective distribution channels and will now find new, lower but constant market share of sales.

  7. PC sales have declined because routine online activities – checking email, finding an address, buying a book from or a pair of shoes from – USED TO require a PC, but now can be done with a tablet or a smartphone. And, the last round of PC improvements was so spectacular – huge upgrade in the amounts of memory, incredibly fast processors, massive flash-drives instead of mechanical hard drives, etc – and was not accompanied by a similar upgrade in software (even for gaming!), that there was really no reason to do the annual or semi-annual PC upgrade that so many of us have been doing for the last 20 years. If PC manufacturers didn’t see these trends coalescing, they don’t deserve to be in business…

  8. LOL. The Death of the PC has been predicted many many many times in the past. (XBOX,PS2,MAC, smart phones etc.) I am no great fan of the WINTEL duopoly but the form factor is just hardware. Technically a MAC runs INTEL Chips. Gamers, programmers, Scientists, engineers will always need and use cutting edge PC machines and their raw power. I’ll leave the tablet toys to the Fan boys who cyclically predict the death of the PC and leave Wild predictions to them like the Mad St. Corner Prophets they are.

  9. In my view the PC is not dead, the form factor is dead. We will still need PC’s to create and edit content, I’m not talking bout social media aggregation or sending an email, creating documents and software and so forth.

    What will happen in the next two years is that the PC will be reinvented, maybe it merge into smart TVs, or with the help of the wi-fi ac standard becomes a streaming box that we will be able to use anywhere we wish, streaming the display to the smart tv or any other flat surface for that matter.

    What is obvious is that the wintel monopoly will be broken up soon, consumers have moved on and they did not adapt quickly enough. More choice for the consumer going forward :)

  10. The unfortunate bit is that PCs are going to become more expensive, as competition dies out. This will force more people to shift towards tablets. Setting up a powerful workstation for heavy duty computing was fairly cheap until now. Won’t be so for much longer. Will hurt small businesses.

  11. Moore’s Law shifted growth to ambient applications. Microsoft’s strategy needs updating with tactics to support developers with devices, frameworks, tools for the ambient-era. Then business apps can be written for always-on as consumer apps typically are.

  12. WaltFrench

    “ ‘…the Windows 8 launch not only didn’t provide a positive boost to the PC market, but appears to have slowed the market,’ said Bob O’Donnell…”

    If people miss the start menu, etc., why, HP, Dell, Lenovo and methinks exactly every other Windows OEM would be just tingly happy to sell them the legacy desktop experience on similar hardware to what they thought was just fine six months ago. Even, as it works out, with Windows 7.

    The old hardware and software standards continue to do the old jobs just great. It’s just that there’s no great surge of new employees, new technology or new approaches that the legacy machines address. So, no need to buy ’em. Meanwhile, more mobile applications, etc.? Windows is still missing critical mass of customers, both in the enterprise and consumer space. Call it chicken-and-egg, virtual/vicious circle or network effects, Microsoft is unused to being on the wrong side of critical mass and has no playbook for what to leverage from if holding back Office from iPad doesn’t work (which it doesn’t).

    With Mac sales also down, Windows may be ceding tiny share numbers to Apple, but the far bigger problem is the shrinking pie and, as Erica notes, the fact that Microsoft’s efforts in the post-PC space have been nearly fruitless to date. Since that pretty well covers all the story, the story sounds like a bit of a cover-up to the fact that analysts have been promising sunshine once Win8 was out, whereas the implosion was merely gathering steam. Good thing for IDC that I’m not in charge of buying their reports at my firm.

    • Calahan


      The consumer PC market that lacks productivity needs has moved or is moving away from Microsoft. Microsoft got into trouble with the DOJ because of this market – Windows Media Player, Internet Explorer software etc.

      If the PC industry has to collapse completely, that will need verticals including gov, smb, enterprise and defence to dump Windows workstations (lap/desktops) and move to smartphones/tablets. They will need to dump Office and Exchange/.NET. As well as any legacy software developed as native apps on client or server sides.

      The whole thing will not touch Microsoft beyond reduction in revenue by $2 or $3 billion in revenue per year and profit reduction may be breakeven.

      The losers are the OEMs. Microsoft can afford to dump the consumer market and survive on vertical productivity markets for the next two decades.

      If Microsoft collapses, that will lead to a loss of $600 billion in US GDP. That is not gonna happen.

      Then of course, there is dumb business logic thrown around in places like here and there is real microeconomic theory that one can learn and understand how industries can change.

      The ecosystem will shrink to half a trillion dollars and players like Acer, Asus, Toshiba, Sony, Samsung etc will exit the market and that is actually good riddance for Microsoft.

      Microsoft only needs 4 hardware makers or 3 if you discount HP – Lenovo, HP, Dell, white-brand vendors. One can add Surface for the future.

      That is a sure bet.

  13. what Apple is shortsighted in, is consumer shift to larger phone screens, and repeating its mistake when it lost the PC war to Windows, Apple’s lack of iPhone choices. Apple has been slow to adjust to this new reality. Years after Apple introduced it, roughtly 100 million iPads have bee sold, compared to 75 million PC’s in the 1Q13 shipped alone. At the same time, the iPad is losing table marketshare. It’s quite a horror for Apple’s stock.

    • WaltFrench

      Heh. Phones too small and tablets too big. And still, sobbing all the way to the bank each night, sore from dragging those huge bags of money.

      Apple certainly *IS* losing share in tablets to lower-cost devices, just as worldwide (not in the US) it is letting $100 no-name (and no-Google®) Androids replace the $50 featurephones. But it looks like they’re holding or gaining share in US smartphones, as competitors are being starved out—Google makes it too hard to differentiate an Android device enough to get enough profit to plow back into cutting-edge features such as solid cases, battery-smart LTE engineering, etc, except by the Samsung scale+massive ads approach.

      So it’s not obvious how the network effects shown here — customers preferring the richer mobile app environment of iOS, especially for tablets — evaporate from under Apple. They’ll happily cede the cheapo device you give to the kids that generates zero brand loyalty, zero profits and near-zero customer delight. Likewise, I personally doubt they’ll do a cheap phone thing, just as they refused to do the cheap netbook thing until they blew away the industry with the iPad.

    • His Shadow

      Yes, Apple lost the “war” so badly that it became the most valuable technology company on the planet by reinventing and even creating new categories of consumer electronics.

      On a scale of concrete to wood, how dense is your skull?