Tag: PC slump

Tablets to outsell PCs by year end

Posted on July 26, 2013 by - News

cheap-tabletsIt appears that worldwide shipments of media tablets will outpace PCs by the end of the year. Speaking at Google’s breakfast event on Thursday, head of Android and Chrome Sundar Pichai shed light on some impressive tablet shipment figures. His claims are backed up by IDC’s latest reports.

Pichai said tablet sales by the end of the year should hit 225 million, with a total of 70 million Android tablet activations, up from 40 million last year, reports Slashgear.

However, Android is gaining ground on iOS and Pichai claims one in two new tablets is based on Android, not iOS.

This basically means tablets will start outselling PCs soon. Sales of corporate PCs won’t be as affected as sales of consumer PCs. Many consumers are apparently shunning their PCs and using tablets to perform basic tasks. Of course this doesn’t apply to users who use productivity applications on their computers.

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However, the PC market seems to be bottoming out. Tablet shipments should hit 300 million units by 2015 and 400 million units by 400, but PC sales should stabilise at current levels and start recovering next year.

Although tablets are disrupting the PC industry, the trend can’t go on for much longer. Over the next couple of years anyone who could completely replace their notebook with a tablet would have done so, hence PC shipments should remain relatively stable, although they’ll still be short of 2011’s record.

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Interestingly, the forecasts don’t show any slowdown in tablet sales through 2017. As tablets mature, sales should start cooling down, but as things stand now, tablets still have a lot of potential for long-term growth.

The real question is how many tablets in 2015 and 2017 will be hybrids. Intel is pitching its 2-in-1 concept and PC vendors will be eager to embrace them. Hybrid tablets will effectively blur the line between tablets and ultraportable notebooks. If Intel has its way, much of that 400 million figure forecasted for 2017 will belong to hybrids.

However, we are not entirely convinced Intel and Microsoft can pull it off without sacrificing a few sacred cows in the process.

EMEA PC sales slump by 22 percent

Posted on July 19, 2013 by - News

pc-sales-slumpPC shipments in Europe are down again. New figures fresh out of the International Data Corporation (IDC) show that second-quarter PC shipments in the EMEA region were down 22.2 percent compared to the same quarter last year. 

EMEA PC shipments last quarter reached 19.6 million units and portable PCs got the worst of it, with a 26-percent drop and shipments of 12.4 million units. Desktops fared a bit better, with shipments of 7.2 million units, down 14.6 percent. 

In Western Europe shipments declined by 21.2% year-on-year. Britain did rather well, all things considered, as it was down just 14%. Germany slowed down 18.7%, while France remained the softest with a 20.9% drop. 

However, let’s not forget about Southern Europe – PC shipments in Spain dropped 43.7 percent and with no end to Spain’s economic woes in sight, the trend is likely to continue. Central Europe was down 27 percent, while the Middle East and Africa slumped 18 percent. Although Middle Eastern economies and Turkey are doing rather well, political instability and economic uncertainty are taking their toll. 

“The evolution of form factors and the change in perception of mobile computing to ‘always on and always connected’ devices, development of social networks and Internet infrastructure, are all changing consumer behaviour impacting the way PCs are utilized,” said Maciej Gornicki, senior research analyst, IDC EMEA Personal Computing. “While Windows-based hybrid devices, convertible or ultraslim notebooks with touch capabilities generate a clear interest, sales remain weak.”

Gornicki noted that one of the main inhibitors to growth in new form factors remains price, but IDC expects prices to tumble in time for the holiday season and sales of ultraslim notebooks should pick up in the fourth quarter and beyond. 

It is also worth noting that notebook sales figures include mini notebooks, or netbooks, which are dying out. Meanwhile desktop sales don’t appear to be slowing down at the same rate as portable PC sales, as they can’t be cannibalized by tablets. Besides, desktops are a staple for small businesses and corporate users who can’t always hold off purchases like consumers.

Although the decline was significant, some vendors still managed to stay in the black. Lenovo’s shipments grew 19 percent year-on-year, making it the only big brand to see any growth. Lenovo ranked second, with 2.62 million PCs shipped. HP is still the EMEA market leader with shipments of 3.72 million units, but unlike Lenovo its shipments were down 23.2 percent compared to a year ago. As a result there was no big change in HP’s market share, which currently stands at 19 percent, down from 19.2 percent. However, Lenovo’s share increased from 8.7 percent in Q2 2012 to 13.4 percent last quarter. 

Acer ranked third with 2.26 million units, but it also suffered a massive 42.2 percent drop in shipments and saw its market share tumble from 15.5 percent to 11.5 percent. Dell’s shipments dropped 9 percent, but it actually managed to grow its market share to 10.7 percent, up from 9.1 last year. Asus also suffered a slump, with 1.69 million shipped boxes, down 38.5 percent.

Gartner slashes 2013 IT forecast

Posted on July 3, 2013 by - News

pc-sales-slumpGartner has revised its forecast for worldwide IT spending due to very soft demand for PCs. The outfit believes sales of traditional PCs will continue to lose steam in the second half of the year and there seems to be no end in sight. 

The analyst firm estimates spending on IT will total $3.7 trillion this year, which is actually up two percent from last year, but it is still far short of 4.1 percent predicted earlier this year. A number of other factors are hurting demand. Big G said unfavourable exchange rates and constant currency growth in Western Europe are not helping, either.

Windows 8 and Haswell failed to jump start the PC market, Gartner notes , but there might be light at the end of the tunnel. New devices and new form factors are coming, but at this point it is very unlikely that a bunch of hybrids and touch-enabled Ultrabooks can turn the tide. They will help, but they won’t reverse the trend.

Although IT departments aren’t expected to go on a spending spree over the next six months, things could change in early 2014, as they get ready to phase out XP boxes in Q1 and early Q2. Despite that, there doesn’t appear to be much room for optimism this year.

Windows 8.1 will launch on a number of new devices, but nobody is expecting it to make much of an impact. Intel Haswell and AMD Richland chips are out and the first products are already shipping and they will soon be joined by low-voltage Atoms and AMD Jaguar based APUs. On top of that, new Ultrabooks and hybrids are coming, too.

However, businesses rarely go for Atoms and Jaguars and IT departments tend to view new form factors like hybrids and thin clamshells as unnecessary gimmicks, so most new products that will enter the fray this year will be consumer oriented.

Samsung may be about to ditch desktops

Posted on June 25, 2013 by - News, Products

samsung-aioSamsung might not be the first name that comes to mind when you think of desktop PCs, but the Korean giant had a handful of interesting products, including some stylish all-in-ones. Sadly though, it might be getting out of the market just as it was starting to look like it was about to make its mark.

According to the Korea Times, Samsung has decided to ditch its desktop business, which was deemed unprofitable. Instead, Samsung wants to devote itself to tablets and laptops.

“Demand for conventional desktop PCs is going down,” a Samsung Electronics official told the Korea Times. “We will allocate our resources to popular connected and portable devices.”

Another Samsung official said the company is restructuring its PC business through product realignment toward profitable products – and desktops don’t appear to be very profitable at the moment.

Oddly enough, Samsung launched its latest all-in-one PC last week and the Atic One 5 Style is quite a looker. Sadly though, while AIOs might be pretty, they don’t seem to be generating plenty of cash .

On the other hand, Samsung’s decision to throw in the towel should be welcomed by competing vendors. After all, Samsung spent billions developing and marketing its Galaxy smartphone range and now it’s certain that it won’t to the same in the PC space.

Big G sees more gloom for PC churners

Posted on June 25, 2013 by - News

pc-sales-slumpThe PC slump is set to continue, while tablet sales will remain strong well into the future, according to fresh data from Gartner.

Sales of traditional PCs are expected to hit just 305 million units this year, down 10.6 percent from last year. Things might be a bit better in 2014, but Gartner is still forecasting a 5 percent decline.

Even if non-traditional form factors, such as Chromebooks, hybrids and skinny clamshells are added to the PC figures, we’re still looking at a 7.3 percent decline this year.

Meanwhile tablets are still going strong. Tablet shipments are expected to reach 202 million units this year, up from 120 million in 2012. In 2014 tablet shipments should hit 276 million units. Mobiles are growing as well, but not at the same insane pace. Smartphone shipments are expected to grow by about 4.3 percent, with a volume of more than 1.8 billion units in 2012.

As far as non-traditional ultramobiles go, Gartner believes shipments will double this year, hitting 20 million units. Next year they should double again, to 40 million units, but even that won’t be enough to offset the slump across the rest of the PC market.

Demand for tablets and ultramobiles could be propped up by BYOD. Gartner believes that 72 percent of personal computing devices will used in the workplace by 2017 thanks to the new trend, which is already causing plenty of headaches in IT departments across the globe.

However, tablets might be about to run out of steam, as they are maturing fast and demand for high-end gear is evaporating.

“The increased availability of lower priced basic tablets, plus the value add shifting to software rather than hardware will result in the lifetimes of premium tablets extending as they remain active in the household for longer. We will also see consumer preferences split between basic tablets and ultramobile devices,” said Gartner research director Ranjit Atwal.

Interestingly, the combined share of Apple OS devices might overtake Microsoft’s OS share by 2015. Around 296 million Apple devices will ship this year compared to 339 million Windows devices. However, Android will outpace Apple and Microsoft combined, with shipments hitting 866 million units this year and passing the one billion mark next year.

Analysts call on Acer to rethink its strategy

Posted on June 24, 2013 by - News, Opinions

acer-logo-ceLast week Acer held its annual shareholder bash in Taiwan, which was marked by a strange mix of optimism and admissions that the company was unprepared for the boom in tablets. Acer chairman Wang Jeng-tang issued an apology to shareholders, as he failed to boost the company’s shares, but he reiterated Acer’s commitment to the traditional PC market.

Asustek blames Win8 for poor sales

Posted on June 17, 2013 by - News, Products

asus-buildingAsustek has cut its Q2 forecast for notebook and tablet shipments and unsurprisingly it is blaming soft demand for Windows 8 for its woes.

The company now expects its second-quarter notebook shipments to fall 10 percent sequentially to 4.23 million units. Back in May the Taiwanese outfit said it hopes to ship 4.8 million notebooks in the second quarter.

Surprisingly tablet shipments were also revised downward by 10 percent to 2.7 million units. Since Asus is moaning about Windows and it is expected to have a strong Android lineup, this may indicate that demand for Windows 8 tablets is even worse than expected – and it wasn’t very optimistic to begin with.

The gloomy figures were delivered by Asustek CFO David Chang during a shareholder meeting on Monday, but he also had a caveat. Chang pointed out that notebook and tablet shipments are poised to grow significantly in the third quarter, thanks to new product launches. Fourth quarter sales should remain flat, or see small gains. Despite the revised forecast, Chang said the company is on track to meet its original goal of shipping 20 to 25 million notebooks and 12 million tablets this year, reports Focus Taiwan.

Asustek CEO Jerry Shen also hinted at a strategic shift from PCs to tablets, which already make up 15 to 20 percent of the company’s revenue. By the second half of the year they might contribute between 20 and 30 percent, as the company managed to boost margins on tablets to a similar level to notebook margins. Shen said this was done by clever research and development, with a pinch of cost cutting.

Needless to say this is very good news for Asus, as the company already has a top notch Android tablet portfolio, from the low-end to its posh Transformer series. Cutting tablet production costs is also good news for Windows tablets in the long run, but they won’t do well this year.

Citi sees more gloom in PC market

Posted on June 10, 2013 by - News

pc-sales-slumpIt’s no secret that things are bad in all facets of the PC market and Citi Research believes things are about to get even worse. In a note to investors sent late Friday, the outfit revised its previous forecasts downward. It originally expected the PC market to contract 4 percent this year, but now it expects a 10-percent slide.

The dire predictions indicate that Windows 8.1 and Haswell won’t have much of an effect on overall shipments. It cited sub-seasonal demand in the first quarter and a slowdown in notebook production as contributing factors. Citi also noted that the benefits from Haswell and Windows Blue will be muted and that PC-end demand will remain soft. Computex didn’t help and emerging market aren’t coming to the rescue, either.

“We do not see any meaningful catalysts near-term supported by our product and company meetings at Computex in Taiwan last week which revealed a focus on convertible & higher-end Ultrabooks running Haswell, which addresses the smaller premium notebook market,” Citi said. “We also believe investors will be disappointed when they learn that low-priced touch-capable notebooks (sub-$600) will not be available to consumers until 4Q13.”

Citi forecasts notebook shipments of 179 million units this year, down from 201 million in 2012. Desktops are down as well, 137 million units vs. 148 million units last year. Meanwhile tablet shipments are expected to hit 237 million units, up from 144 million in 2012, reports CNET.

It gets worse. Citi says it previously modelled +2 percent growth year-on-year in PC shipments in 2014 and 2015. That figure has gone out the window.

“We now expect cannibalization from tablets…to more than offset any ‘stabilization’ in demand resulting from stretched replacement cycles or more compelling notebooks,” Citi said.

Compelling seems to be the key word in the PC industry, nowadays. There are no compelling new products or form factors, no compelling OS upgrade or compelling new features. PCs are becoming so mature that they are starting to resemble household appliances, with no apparent need to upgrade until they die.

IDC predicts more PC gloom

Posted on May 29, 2013 by - News

pc-sales-slumpIf you thought 2012 was a bad year for the PC industry, think again. Worldwide PC shipments are expected to fall by 7.8 percent this year, according to the latest IDC forecast. The forecast can be summed up in a single trend – consumers aren’t upgrading their PC boxes because they’re saving cash for tablets and smartphones.

In fact, the outlook has been revised downwards. It was originally believed that the PC market would decline 1.3 percent in 2013, followed by a slight rebound. The new outlooks sees a 7.8 drop in 2013 and a 1.2 percent decline in 2014, with shipments recovering to 333 million units in 2017, still below the 349 million shipped last year and 363 million shipped in 2011.

It is hardly surprising, as even Intel executives are admitting that there is practically no incentive to upgrade at the moment. There is no compelling hardware and Microsoft hasn’t exactly done a brilliant job with Windows 8. The mature PC market is trying to put up a fight against the tablet onslaught and it is taking a beating.

“As the market develops, usage patterns and devices are evolving,” said Loren Loverde, Program Vice President, Worldwide Quarterly PC Trackers at IDC. “Many users are realizing that everyday computing, such as accessing the Web, connecting to social media, sending emails, as well as using a variety of apps, doesn’t require a lot of computing power or local storage. Instead, they are putting a premium on access from a variety of smaller devices with longer battery life, an instant-on function, and intuitive touch-centric interfaces. These users have not necessarily given up on PCs as a platform for computing when a more robust environment is needed, but this takes a smaller share of computing time, and users are making do with older systems.”

Things could pick up next year, as support for Windows XP expires and businesses rush to upgrade. However, the average consumer probably won’t rush to replace an old PC. The update cycle is getting longer and longer. Another worrying trend is the BYOD phenomenon, which allows users to use their own gear in the workplace, thus delaying and reducing the volume of corporate PC purchases.

One has to wonder what will happen to average selling prices and margins over the next couple of years. Businesses replacing turn of the century XP boxes will probably look for the cheapest possible solutions. At the same time, demand in mature markets will continue to decline for the foreseeable future, while demand in emerging markets should start to recover next year. Emerging markets also tend to prefer cheaper devices, which means the era of “goon enough” computing is here to stay.

The enthusiast market has always been a bastion for high-end component makers, but it seems to be running out of steam as well. New CPUs and GPUs don’t deliver huge performance gains seen in past generations, yet they’re getting pricier. Affordable 4K screens are still years away and new consoles are about to hit retail, disturbing the PC gaming landscape further.

Acer to slowly revamp product line, focus on tablets

Posted on March 25, 2013 by - News, Products

acer-logo-ceAcer is apparently planning to revamp its product line in an effort to revive sales and growth momentum.

Last week Acer announced that it will increase R&D spending to between 1.2 and 1.5 percent of annual sales this year. Acer apparently wants to invest more in order to stay competitive in the tablet market, while at the same time improving its notebook line. Acer hopes to sell between 5 and 10 million tablets this year.

Analysts, however, see trouble ahead. Deutsche Bank analyst Ivy Lee said Acer might encounter new challenges that might cause its sales to remain flat, reports Taipei Times. Windows 8 is apparently the biggest risk, since there is still not enough consumer feedback on Windows 8 tablets and notebooks.

Acer recently killed off a couple of its value brands, after it experienced a huge inventory loss in late 2011. Like other leading PC makers, Acer is experiencing a lot of margin erosion and falling market share.

Citigroup Global Markets analyst Kevin Chang believes Acer will continue to struggle in the near future. In a recent note he argued that Acer’s current strategy is simply not working and that it has to be more aggressive on pricing.

As the PC slump drags on, Lenovo, Asustek, Dell and HP will try to hold their ground and fierce price competition is to be expected. As for tablets, Asus and Lenovo have done a bit better than other major PC players. Lenovo did particularly well in China in the last two quarters, while Asus has managed to make quite a name for itself in the Android tablet space with the Transformer series. It also builds Google’s Nexus 7 tablet.

Windows 8 fails to woo people’s hearts and minds

Posted on March 4, 2013 by - News, Opinions

msNobody expected Windows 8 to have a huge impact on the sluggish PC market, but now it seems that things could be a bit worse than Redmond would have us believe.

According to monthly statistics from NetMarketShare, sales of Windows 8 are not picking up much speed. In fact, in February Windows 8 ranked behind XP and Windows 7, with 38.99 per cent and 44.55 per cent share respectively.

At 2.76 per cent of web traffic, Windows 8 is even trailing behind Vista, one of Microsoft’s biggest lemons, which is still terrorising 5.17 percent of PC users.

The share of Windows 8 PCs on the web saw very little growth, just 0.41 percent from January, when it commanded a 2.26 percent share. In December the share was 1.72 percent.

The trend must be raising some eyebrows at Redmond, but there doesn’t seem to be much anyone can do to speed up Windows 8 adoption now. Although cutting the price is always an option, it would probably result in a brief spike, followed by plenty of angry questions from shareholders.

A quick glance at a couple of European price search engines reveals a relatively high number of Windows 7 desktops and laptops in practically every market segment, although Windows 8 is gaining a lot more traction in the high end and in Ultrabooks. However, volumes are what matter, as the same OS ships with a £1,000 Ultrabook and a dirt cheap 15-incher. Speaking of the latter, thousands of 15.6-inch and 16-inch laptops are still listed as shipping with Windows 7. Many of them can be upgraded to Windows 8 at no cost, but then again plenty can’t.

Holiday PC sales failed to impress and it appears that there are tons of early- to mid-2012 Windows 7 laptops and desktops in the channel. In fact, out of a few thousand 15-inchers listed at Skinflint, just 183 SKUs ship with Windows 8 Pro and 578 with Windows 8. However, 1396 SKUs are shipped with Windows 7 in four distinct flavours. The trend is even more evident on the continent.

At this rate, it will take a few quarters to get rid of Windows 7 inventory. In addition, very few consumers seem to be upgrading their existing PCs to Windows 8, despite the fact that the vast majority of Windows 7 PCs will easily run the new OS. In fact, most will end up even faster, without any hardware upgrades. However, money is tight and few people are willing to upgrade their operating system, especially as Windows 8 doesn’t bring a whole lot of headline features to the table.