The PC market is showing significant signs of contraction thanks to weak demand by consumers and pressure from tablets (in particular, the iPad). Is the love affair with the PC over?
The numbers are pretty bad. According to research group Gartner, PC sales saw a year-on-year decline of 1.1%, down from 85.1 million units in the first quarter of 2010 to 84.3 million during the first quarter of 2011.
While worldwide the numbers only fell by 1.1%, in the US the decline is even more dramatic, falling 6.1% year-on-year.
In the US the biggest casualty was Acer, seeing a unit sale decline of 24.9%, and Dell dropping 12.1%. It’s not all bad news though, with Toshiba seeing a 10.9% unit sale increase, and Apple a whopping 18.9%.
The picture painted by IDC is just as bleak:
Note: All IDC unit shipments are in thousands.
What’s bad for the OEMs is also bad for Microsoft. Fewer PC sales means less revenue from sales of Windows licenses. The economic downturn saw Microsoft learn that it needed to be able to sell Windows licenses separate to new PCs, and I expect that it will put an increasing squeeze on all users to keep up with the latest operating system or miss out. One example of these tricks already in action - That shiny new PC you bought with Vista on it back in September 2009, forget about running IE10 on that when it’s out in a year or so. The hardware might not be obsolete, but Microsoft will make sure that the OS feels like it is.
Even keeping up with free software is going to cost you.
And why make such a subjective statement? We all have differing uses for PC's. I don't expect my parents to ever need a powerful PC for photoshop intensive work or to render 3D images. A $500 iPad already replaces a desktop PC for them. Already 28% of users say the iPad is their primary computer. MS should be fearful of this stat, the iPad is only one year old and already 28% is making it their primary PC?
