PCs are dead

I’m going to throw out a number and I want you to guess what it means.

Ready?

82,600,000

Now I’m going to throw out another number related to the first and I’ll give you a chance to link the connection.

7%

Alright, now considering this post is titled “PCs are dead” you probably figured out that these numbers are bad. And you’re right, although I would add that it’s worse than bad… it’s abysmal.

Put your PC in a coffin

According to January 2014 data from Gartner, PCs are becoming less and less relevant.  For example, 82.6 million is the number of desktop and mobile PCs shipped during the last quarter of 2013.

Initially 82.6 million might seem like a number worthy of acclaim… that is until you understand what the 7% represents.

Mikako Kitagawa, a principal analyst at Gartner, explained that 82.6 million PCs were shipping globally during the fourth quarter of 2013 but that’s still 7% less than the same period of the prior year.

Consequently, this makes it the 7th year in a row of declining shipments.

And although there was a spate in technology sales during the holidays, PCs were chronically usurped by the boon of tablets.

In a statement Kitagawa said

We think that the U.S. PC market has bottomed out.  A variety of new form factors, such as hybrid notebooks, drew holiday shoppers’ attention, but the market size was very small at the time. Lowering the price point of thin and light products started encouraging the PC replacement and potentially some PC growth in 2014.

Clearly consumers are buying into the ballyhoo of ultra slim, ultra mobile tablets and smartphones.  Today people balk at the idea of buying a desktop PC; it feels too  antiquated, so… year 90’s

It’s not that the public has an aversion to PCs, it’s just that people are discovering they can get almost everything they need on a tablet or smartphone at a cheaper price.

Counterarguments…

Now, some might say that PC isn’t really doomed because tablets aren’t ready for serious, professional work. People don’t gravitate toward tablets and smartphones when it’s time to be industrious.  When’s the last time you saw someone using a tablet for professional media creation?

Others contend that PC gaming is categorically superior to any other medium and tablets are no match.  Finally some note that the internet is teeming with PC enthusiasts who love modifying their desktops and these people aren’t ready to forego their PC towers.

And while I agree with these points I think tablets are tactically in a better position to dominate the entertainment slice of the market pie.  Almost everyone uses their tablets to consume videos, music and photos and their lower price points and innate portability makes it a clear a winner for most buyers.

We love our tablets because they give us the internet at the fraction of the cost of a PC and can keep us entertained for hours wherever we go.

Yes most tablets and smartphones aren’t as responsive as PC’s; however, they aren’t glacial either and some actually have processors that rival lower end laptops.  For example the Google Nexus 7 has a 1.5GHz quad-core Snapdragon S4 Processor.  According to research from the Indian tech site Fonearena – this is pretty fast.

Now of course all that speed comes at the price of battery life; and that’s where PCs triumph; however, in our increasingly mobile, on-the-go, always-connected world I think more and more people are going to supplant their PCs with tablets.

I mean… we have empirical evidence that supports my hypothesis.  Just look at the worldwide data from Gartner:

The last column shows the percent change in growth from the fourth quarter of 2012 verses the fourth quarter of 2013.

With the exception of Lenovo and Dell, all values are negative.  Dell is only staying afloat because it’s focusing on consumer PCs in emerging markets and Lenovo is using it’s prodigious size as a company to inundate the market with PCs.

But I have to ask, and you should ask to:

Does the world really want a desktop PC?

I could be wrong, but I seriously don’t think so.  ASUS and Acer have the steepest declines at negative 16% and 19% accordingly; however, that’s because they’ve judiciously decided to channel their energies into giving the world what it wants: compact, versatile, battery-efficient tablets.

But I just showed you worldwide data, how does the US fare?

Domestic shipments weren’t much better than global shipments.

Garnter says last quarter the US shipped 15.8 million PCs which was a precipitous drop from the same quarter last year: 7.5% to be exact.  You can read the full Gartner report online.

And it get’s worse.

American market research firm IDC corroborates Gartner’s findings.

According to its Worldwide Quarterly PC tracker, global PC shipments topped off at 82.2 million units last quarter which was a year-over-year decline of 5.6%.

Loren Loverde, VP of the Worldwide PC Tracker said:

The PC market again came in very close to expectations, but unfortunately failed to significantly change the trajectory of growth, Total shipments have now declined for seven consecutive quarters, and even the holiday shopping season was unable to inspire a turn in consumer spending.

The IDC report shows that shipments are contracting and the rate of attrition has been growing worse for the past 7 years.

New trends like Google Chromebooks and other mobile devices are averting the public attention from traditional computers. People want options and today options abound.

The Bottom Line

The research from Gartner and IDC both attest to the stark reality that the PC is dying, and I would argue that it’s already dead.

Desktops have atrophied for almost a decade and we have no reason to infer this won’t continue into the future.

A few enterprises are still pumping the lifeblood into the PC markets; however consumers are scooping up tablets and smartphones like strawberry ice cream.

The data above articulates the sore truth that desktops are waning and will probably continue to die as we 2014 matures.

What do you think?

Are PCs dead?