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

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?

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TOPICS: Hardware, Tablets, EU, PCs
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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, Tablets, EU, PCs

Michiel van Blommestein

About Michiel van Blommestein

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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37 comments
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  • Spreading Misconception Again

    I think most of us are getting sick of the misconception tech journalist like Jo Best are spreading. PC's are content producing and productivity machines, exactly what businesses and power users need/want. Tablets are content consuming machines, exactly what consumers and non-technical users need/want. 2 separate markets, PC used to own both markets, but now they just own one. If you think PC's are dead you need to have your head examined.
    Sean Foley
    • Not dead but...

      Not dead but way down. For each content creator there are 10 content consumers. So the PC market is heading south.
      prof123
      • The PC market has stabilized

        The PC market has stabilized. Traditional PC form factors are still declining, but tablets and other touch based PCs are on the rise.

        http://www.zdnet.com/intels-mixed-q4-pc-market-stabilizes-tablets-grow-data-center-sees-slower-growth-7000025265/
        P. Douglas
        • Wrong Victim

          Wrong victim. It is not the PC that died but the desktop version that is on the way out. Computers are becoming more personal and more portable all the time. Being tethered to a desk is all that has changed.
          MichaelInMA
        • Don't blame PC or mobiles, blame Windows PC

          Every honest Windows user (current or former) surely admit that his example is not just abnormity but likely a norm:

          It was reported that Maude had to install a personal Wi-Fi network to use his iPad, and chief operating officer Stephen Kelly uploaded a video of his PC taking seven minutes to boot up." "

          http://www.computerweekly.com/news/2240212283/First-steps-on-the-Cabinet-Office-technology-transformation-journey

          So many of former Windows advocates have turned their back to Redmond and search some better solution:

          "GDS is also working on a potential open source desktop solution using Ubuntu instead of Windows."
          Napoleon XIV
          • Abandoning Windows is the way to better change

            Because Windows is

            1. Insecure
            2. Unstable
            3. Get slower
            4. Conflicts between hardware and software
            5. BSOD
            6. Expensive and not at all effective ecosystem
            movetolinux
      • Not really, prof123

        "For each content creator there are 10 content consumers"

        Right, content consumers weren't really content creators, so short of those that bought a tablet as opposed to a PC to view that content, that's pretty much leveled off.

        Now with more people craving content, there will be more content creators, which will keep PC's moving along just nicely.
        William.Farrel
        • Love that cowbell skit you did - great work

          I didn't know you were into PCs also.
          j4w4
          • You dispute the logic?

            With the growth of content consumption, do you really believe the same people creating that content today will be the only ones creating that content tomorrow?
            William.Farrel
      • So what for every person who builds a house there are 1000 why buy a house

        Like Mr Foley said,
        The PC market used to enjoy 100% of both markets. The PC market has been demoted from a multi-billion dollar industry to simply a billion-dollar industry. People make ridiculous assumptions from nothing more than a directional market trend. Yes, the market has changed, yes it has been in decline. But it's nowhere near death. Just changing in response to new technologies more than anything and different consumer wants/needs.
        j4w4
      • If you live in Australia

        wouldn't they be heading north.

        It's all a matter of perspective.
        Pastabake
    • Bravo

      Thank you!
      brijem
  • So I read the headline "The PC market is dead?"

    And the topic seems to be about Poland's PC market. The headline could have been more accurate like "The Poland's PC market is dead?" since this will reflect what the article is all about.

    And for those who respond with "welcome to ZDNet," I've been a ZDNet reader as far back as year 2000 or so.
    Grayson Peddie
  • The PC market is dead? Looks like no-one told these hardware companies

    PC market is not dead, just declining until it tapers off which is about the time people will realize they don't need tablets.
    Loverock.Davidson
    • It's marginalized because Windows is disaster

      You can live in your Windows fantasies but reality of that terrible OS is well known outside the Redmond bubble.

      "It was reported that Maude had to install a personal Wi-Fi network to use his iPad, and chief operating officer Stephen Kelly uploaded a video of his PC taking seven minutes to boot up."

      http://www.computerweekly.com/news/2240212283/First-steps-on-the-Cabinet-Office-technology-transformation-journey
      Napoleon XIV
  • MS SUPPORTERS HAVE A FULL TIME JOB REFUTING THE DEATH OF THE PC

    They just don't understand that if the PC industry wasn't dying then these tech sites and Wintel wouldn't need their services.

    The fact that everyone can see it but them, the fact that you're innundated with evidence everyday, the fact that Mobile has revolutionized computing in a way the decrepit PC never could and never will, the fact that MS is lost because consumers are choosing mobile OSes, the fact that Intel is exasperated because consumers are choosing devices without Intel CPUs, the fact that OEMs are seeking alternatives to the Wintel paradigm, the fact that MS and Intel held back mobile technology to begin with... because they didn't want an open computing market that they would actually have to compete in.

    Looks like MS and Intel were right.

    They can't compete and the world used Wintel because that's basically the only choice we had.

    Times have obviously changed drastically and Wintel now has to compete on its own merit.

    We all know how that's working out for them!
    orandy
    • ORANDY HAS A FULL TIME JOB REFUTING THE LIFE OF THE PC

      He just doesn't understand that if the PC industry was dying then the OEM's would not have sold millions of PC's each quarters.

      Sure there was a decline, as there was 5 years ago. There's always been a cycle of sorts to everything.

      At the same time tablet sales have slowed as the market becomes saturated. "Death of the tablet" we can now call it. "Post-Tablet era" comes to mind as a good name to coin.

      The fact that everyone can see it but him tells me he doesn't want to see.
      William.Farrel
  • It's not dead, but yes, it is in decline

    The decline is slowing. That doesn't mean there's an upward trend either. We may be just seeing a saturation point.

    Oh, and anybody that says PC gaming is growing isn't taking an honest look at the numbers. PC gaming has been steadily falling, but its decline, too, is slowing and stabilizing. It is NOT growing.

    PC gaming is a part of the "content consumption" bits of PC use, but it's only a very small part, percentage-wise. Although revenue size may be a larger part, it is a bubble that will burst once game vendors turn more and more to consoles (which is already happening), since consoles offer a stable platform with static hardware specifications that don't require tweaking across multiple OS revisions with update dependency issues, or hardware driver version testing.
    Joe_Raby
  • Decline of PC sales

    The market is going through a normal transition because PC's have become items that do not need replacing for most until the motherboard dies. OS and software requirements are not forcing equipment upgrading so the update cycle is stretching out. There are not enough new users needing/wanting a desktop entering the market to compensate for the decline. Eventually the sales volume will stabilize. It will act like any "durable" goods market with mostly replacement sales with some growth/decline due to economic conditions.
    Linux_Lurker
  • Normal people never wanted PCs

    Normal people never wanted PCs to begin with, nor did they really need all the power and flexibility the PC provides. But it was the only way to get on the internet for many years. Most home users only care about email, and browsing the web. They don't need a full PC for that. A tablet or a chromebook fulfill that need perfectly. So as these devices get better and cheaper PC sales will continue to decline as these "normal" people move to other devices.
    spackle