Is that a PC on your desk? Windows hybrids, Macs and iPads struggle for share

As the lines between tablets and laptops continue to blur, it gets harder to tell what's a PC and what isn't. Even the two biggest research firms can't agree. No wonder the rest of us are confused.
Written by Ed Bott, Senior Contributing Editor

No one can agree on the definition of a PC.

Does anyone even know what a PC is anymore?

That's not an idle question. Unfortunately, it's a reflection of the confusion among analysts covering this space today.

I've just reviewed four years' worth of data from IDC and Gartner, the two big research companies that release regular reports tracking the state of the PC market. IDC publishes its results in its Worldwide Quarterly PC Tracker, while Gartner's data is part of its PC Quarterly Statistics Worldwide report. Full reports are a subscribers-only product, but both firms publish detailed press releases with each new publication.

So, if you study both sets of data you'll get a good handle on the PC market, right?

Spoiler: They can't even agree on the definition of a PC.

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IDC's reports include this definition: "PCs include Desktops, Portables, Ultraslim Notebooks, Chromebooks, and Workstations and do not include handhelds, x86 Servers and Tablets (i.e. iPad, or Tablets with detachable keyboards running either Chrome, Windows or Android)." [Emphasis added]

I've confirmed with IDC on multiple occasions that their PC reports do not count sales of Microsoft's Surface Pro and Surface Book, or HP's Spectre x360 and Elite x2, or any other portable Windows-based PCs with detachable keyboards.

Meanwhile, Gartner's definition says: "Data includes desk-based PCs, notebook PCs and ultramobile premiums (such as Microsoft Surface), but not Chromebooks or iPads." [Emphasis added]

IDC says a Chromebook is a PC but a Surface Book running Windows 10 isn't. Gartner counts the entire Surface line but leaves Chromebooks off the list.

To make things even more confusing, Apple (alone among device makers) publishes detailed sales figures for both its iPad and Mac lines. And Tim Cook insists that "the iPad Pro is a replacement for a notebook or a desktop for many, many people."

The result is this confusing chart, where I've captured quarterly data from IDC, Gartner, and Apple. To compensate for seasonal swings, I've added a trendline to each data series. (Note that for consistency's sake I've assigned Apple's sales numbers to calendar quarters and not to the company's fiscal quarters.)

(c) 2016 Ed Bott/ZDNet

Data from both research firms supports the conclusion that the traditional PC industry is in decline, with IDC's numbers apparently showing that the drop-off in sales is steeper than Gartner's data suggests.

But hold on for a second. According to an IDC report published a few months ago, 8.6 percent of all tablets sold worldwide in 2015 were running Windows. That's 17.8 million devices, a total that probably includes several million Surface Pro 3, Surface Pro 4, and Surface Book models. (Alas, we have no way of knowing the exact number, because Microsoft doesn't share those details.)

By contrast, Apple sold 20.4 million Macs of all configurations in 2015.

The many faces of the modern PC (Gallery)

If you add those 17.8 million convertible and hybrid devices with detachable keyboards, all running Windows, back into IDC's annual total, the PC industry's decline no longer seems nearly as steep. IDC predicts that the number of Windows devices with detachable keyboard will increase to nearly 21 million in 2016 and that that segment, unlike more traditional PC form factors, will continue to grow over the next few years.

Meanwhile, Apple's performance with its two PC-like product lines is decidedly mixed. The trendline on iPad sales is negative, even downright PC-like. On the other hand, the Mac division, despite selling products that have been widely criticized as out of date, has managed to keep selling more than 4 million Macs per quarter, with a slightly upward trendline.

The average selling price of a Mac in the most recent quarter was $1,175, down about $30 from the same period last year. The average selling price of an iPad was $459, up about $25 year-over-year. Unfortunately, we have no corresponding figures from the hybrid category in Windows-based PCs, but I wouldn't be surprised to see an average selling price north of $1,000 in this category.

After staring at the data for a few days, I've concluded that IDC's definition is hard to justify. The fact that a Surface Pro or an HP Elite x2 can be used as a tablet doesn't change their essential PC-ness; there's absolutely no doubt that these devices are extremely capable replacements for more traditional Windows laptop designs.

And yes, I can also make the case for counting both a Chromebook and an iPad Pro as "PCs," based on their primary use case. On its product page, Apple shows the iPad Pro with a keyboard and with Microsoft Word and Excel running side by side. That's pretty PC-like, if you ask me.

There's no question that the PC landscape is changing. Generic white-box PCs might still be popular in call centers, but those are legacy products at best. The real innovation and profit is coming in form factors that stretch the definition of what a PC is, without breaking it.

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