The return of the PC: Why it's ready for a comeback after years of decline

PC sales will hit bottom this year, but then the (modest) bounce will begin.
Written by Steve Ranger, Global News Director

Devices like the Surface Pro are winning fans even as the traditional PC declines.

Image: CBS Interactive

Worldwide combined shipments of personal computing devices including PCs, tablets, and smartphones will be flat this year, predicted to total around 2.3 billion -- the same as last year.

Shipments of PCs will drop to 266 million, just below last year's total of 268 million, according to the predictions from analyst Gartner.

Shipments of traditional desktop PCs and notebooks continue to drop, and while demand for new form factors like Microsoft's Surface and premium models like the MacBook Air continues to grow, this won't offset the decline in standard PCs until at least next year.

Tablet shipments will also decline this year, as consumers hold onto their devices for longer. There are now nearly seven billion phones, tablets, and PCs in use in the world, the analysts estimate.

"The PC market has been on a downward trend for five years and we've lost around 25 percent of the market over that time. It's starting to hit bottom and we expect that to steady moving forward as businesses, rather than consumers start to refresh their PCs," said Ranjit Atwal, research director at Gartner.


Gartner predicts the embattled PC market will start to benefit from a replacement cycle toward the end of this forecast period, returning to growth in 2018, while better priced premium laptops will entice some to upgrade, even as traditional PC sales continue to decline. Already at this year's CES show vendors have an array of 2-in-1 devices on show, with more to follow.

Flat demand for PCs, tablets, and smartphones isn't all that surprising, considering the markets for these devices have reached near saturation point in recent years.

"It's what we expected; the market is only so big," said Atwal. "The adoption has been very quick, the question now is what are businesses, what are consumers doing with the devices that they have and what new devices are coming in, how do they fit into the overall experience that people are looking for?"

One area of potential growth is in demand for devices like the Amazon Echo, Google Home, and others that incorporate a speech activated digital assistant.

But that doesn't mean the general-purpose PC has had its day: "There is still that general-purpose market because people do want a device that does a lot of different things. The thing that a PC does best is creation. The question is then how many additional devices do people buy," said Atwal.

A bigger issue for traditional PC vendors may be how to fit in when services -- such as Amazon's Alexa -- may be more important to users than the hardware into which they are built.

"The traditional device vendors who haven't really been able to package services: where do they fit in? Whose brand becomes important? Is it the device vendor brand, is it the device brand with the ecosystem, or is it the vendor who is providing the service? Most hardware vendors struggle to deliver the hardware, let alone the services, so there's going to be quite a shakeup I think," Atwal said.

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