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PC-peak is history: Industry preps for further decline

Posted: 21 Apr 2015 ?? ?Print Version ?Bookmark and Share

Keywords:Microsoft? PC? smartphone? tablet? OS?

Falling from a higher place hurts more than simply tripping over. Who better to attest this statement than the PC industry? Previously dominating sales and revenue for consumer electronics, the PC segment is now playing catch up to the trendier and more innovative mobile devices such as tablets and smartphones.

Volume trends are at best difficult to resolve when industry segments are at a tipping point, making the demise of the personal computer a much discussed topic with few solid conclusions. Recent numbers show that peak-PC is behind us, but we have to adjust for one-time factors such as new operating systems or different model configurations to get a long-term trend picture.

These short-term effects have impacted the PC market significantly. The fiasco around Windows 8 seriously damaged the PC franchise. First, it removed direct pressure to upgrade PC desktops and mobiles to match the new code. These upgrades would have included touch screen features as well as better graphics and raw horsepower increases, improving the average unit price by around 20-25 per cent.

The OS upgrade failed because the user base balked at moving from a high quality and stable Windows 7 to a new set of interfaces that better matched the smartphone. Microsoft completely misunderstood the reluctance of their user base to give up on app interfaces and screen operations that had been ingrained for nearly three decades, and the result was the wave of upgrades turned into a delayed ripple.

Windows 8 failed to let the air in

The belated arrival of Windows 8.1 hasn't helped much. The user base has realised that replacement isn't a critical business need, which could be translated into "the existing models meet our needs well, so we'll only replace them when they fail." Windows 8 was seen as apple-polishing and so unnecessary.

Microsoft hasn't helped their case by strongly pushing the browser-based alternative of Office-365. The idea that a cheap, dumb tablet or screen could do the job as well is especially intriguing when control of the app set and security are considered. The cloud office wins all hands down in these categories, though performance still raises questions on occasion.

Hardware-wise, there's only so much that can be offered as new ideas. Two in one laptops are available now, but adding a detachable keyboard to a notebook isn't a huge step forward, and the result is a bit of an Edsel. Sales are growing, but not in any stellar way.

Hybrid disk drives likewise are in the sales doldrums. The idea of getting the best of hard drives might have worked if those pesky flash vendors had kept prices up, but the low-end SSD drives are priced close to hybrid drives, which just aren't particularly attractive anymore.

The outside forces on the PC market are interesting. Tablet sales are sluggish too, but the driving force for this is the realisation that most of today's installed base is plenty fast enough to keep the screen painted. In other words, if it works fine, why replace it? The life expectancy of a tablet is probably six years or more, which is 50 per cent longer than the traditional PC cycle.

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