For the PC industry, the Computex trade show in Taiwan will have a heavy dose of deja vu. New form factors, the latest from Intel and a new version of Microsoft's Windows (sort of) are aligned to drive demand.
Funny how a year makes little to no difference in the Wintel story line.
Last year, Computex highlighted a bevy of Windows 8 devices such as hybrid laptops, touchscreen laptops and tablet convertible devices. None of those devices---excluding touchscreen laptops---generated enough demand to fuel a PC upgrade cycle.
Meanwhile, tablets are poised to pass PC units in just a few years.
So what's different this time? Sterne Agee analyst Vijay Rakesh outlined that the PC supply chain indicates that the system builds are tracking below expectations in the third quarter. Intel's Haswell platform is supposed to be available in June and July, but PC makers are waiting for the Windows 8.1 refresh. Welcome to hurry up and wait 2.0.
The problem: IDC separately said that PC shipments will fall 7.8 percent in 2013 to 321.9 million units. In 2017, IDC projects PC shipments will be 333.4 million units.
Rakesh noted that back-to-school PC sales are likely to be weak. He said:
We believe the PC supply chain OEMs-ODMs are now waiting for Win8.1/Blue, expected to launch in Oct-2013. We believe similar to the Win8 launch last year in October, which held back PC OEMs and ODMs from aggressively pushing PCs at back-to-school, a Win8.1 refresh could be holding the supply chain back. Win8.1 or Win Blue - We believe Microsoft is aggressively rolling out Win8.1; we believe it's the fastest refresh in history post-launch of a new OS Win8. The new Win Blue is expected to resolve some of the drawbacks with Win8, bringing back the "Start" button and provide more user continuity with prior Win OS platforms. We believe 3Q-4Q13 could also potentially see introduction of new 5th-gen iPad, another challenge.
What's unclear is whether Windows 8.1 will drive demand. PC makers have been downshifting their reliance on PCs in many cases. In addition, PC makers are also diversifying operating systems. HP CEO Meg Whitman tells the tale. She said that HP is looking to maintain a profitable PC business and use its channel, distribution and supply chain to its advantage. HP also wants to be about more than Windows.
"Using multiple operating systems, multiple architectures and multiple form factors, we
are moving quickly to produce the devices that customers want," she said on HP's recent earnings conference call.