The PC market is dead? Looks like no-one told these hardware companies

Summary:Some of Poland's hardware companies are looking to start manufacturing PCs again, despite repeated proclamations the market is on life support. Is there life in the PC yet?

With the growing tablet market becoming ever more competitive, some Polish hardware makers are starting to look back to more traditional ventures in the battle to increase their margins.

According to Polish daily Dziennik Gazeta Prawna, some Polish electronics companies are planning to return to producing the kind of kit they did in the past: PCs and TVs. Hardware makers including Action, and Kruger & Matz (some of the many Polish manufacturers that have of late begun to specialise in low-cost tablets) have at the very least declared they are looking into the PC market again.

Others have gone a step further: late last year, AB re-introduced a line of own-brand PCs, called Optimus. (Optimus used to be one of the largest PC makers in Poland during the 1990s, but vanished from the market in 2011, with its parent company focusing on new industries including gaming).

However, the reinvigoration of Poland's PC market won't mean any new manufacturing in the country: the manufacture of Optimus PCs will be carried out in Czech Republic. Any other PC makers deciding to follow AB back into the market are likely to turn to Czech plants too, or else look further afield to the traditional ODM hubs of China and Taiwan.

Has the death of the PC been exaggerated?

Polish companies' decision to (re)enter the PC market will doubtless raise some eyebrows: haven't we heard repeatedly that the PC market in steep decline worldwide? AB says that there is still life in the old dog yet. After all, according to a research report from PMR Consulting in Krakow, 89 percent of companies bought new PCs in 2012.

And, while the tablet market is in rude health in terms of sales, kit makers are worrying that prices are dropping faster than they would like.

According to Dziennik Gazeta Prawda, the average price of a tablet was around €161 at the end of 2013; this year, it could drop as far as €129, thanks to ever-increasing competition. While margins might be compensated by higher sales (between 1.4 million and two million more tablets will be sold this year compared to last, according to the Association of Importers and Producers of Electric and Electronic Devices), companies are still looking to new markets — including PCs and TVs — to offset any further margin erosion.

But does manufacturers' rediscovered enthusiasm for the PC mean a stay of execution for the venerable market? Unlikely — Poland isn't an exception to the rule that PC sales are in dire straits: according to Zoran Vuckovic, an analyst for PMR Consulting, desktops sales have been falling in Poland just as they have been in the rest of the world.

"In 2012, desktops sales in Poland declined by high single-digit percentages," Vuckovic told ZDNet. "For 2013, we estimate that these percentages will double." So, he adds, "there is not much business sense in focusing on this market."

Yes, 89 percent of companies bought new PCs in 2012. But the report also points out virtually all of the sales were made in order to replace broken kit, rather than as a significant upgrade to companies' PC fleets.

Vuckovic wouldn't go as far as saying any exploration of the PC market, such as the Optimus effort, is doomed, however. "I would see Optimus as an individual case. That brand brings up positive images, and AB is not planning to put them on the mass market," he said. "The distributor wants to sell it directly to business clients, where the desktop is still the dominant device [there are four times as many desktops in use in Polish enterprises is four times that of tablets] . The popularity of the brand would have to assist there. However, I repeat that I would not apply this to the PC market as a whole."

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Topics: Hardware, EU, PCs, Tablets

About

Michiel van Blommestein is a Dutch journalist who has been living in Poland since 2010. He worked as a technology journalist in the Netherlands before moving to Poland to work as a regular correspondent for various news outlets. He still loves the bits and bytes though.

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