PC Sales decline accelerates in Q1 2016 - some observations
On April 12 IDC released their preliminary Q1 2016 PC sales numbers for both Worldwide and US sales.
Worldwide - PC sales declined 11.6% to 60.5M units down from 68.4M in Q1 of 2015. That is a faster rate of decline than the 10.5% decline in 2015. Across the big 5 - Lenovo, HP, Dell, Apple and Asus declines ranged from 2 to almost 11%. The remaining vendors saw declines of nearly 20%.
In the US - there was a smaller decline of 5.8% to 13.6M units down from 14.4M in 2015. What is interesting is that the battle here in the US is about market share.
Some vendors like Dell, Lenovo and Apple saw market share growth ranging from 5% - nearly 22% while others like HP saw a significant decline of 14%. Similar to Worldwide numbers - the "Others" category saw a significant decline of nearly 25%.
What this means to me is that the PC market is consolidating - meaning many of the smaller "whitebox" vendors are failing and that the big 5 will be taking share from that market. Worldwide that is nearly 18M units and 2.3M here in the US.
Today's new PCs and laptops are the fastest, most reliable devices ever made with great form factors, excellent graphics and fast networking. Consumers also have excellent breadth of choice from entry level PCs under $300 to high end ultrabooks with 4K displays, pens, cameras and 1TB of SSD storage.
But even a very compelling hardware base - sales are still declining. Why ?
To me two reasons.
1. Mobile - Folks are spending more time on their phones and doing more of their day to day tasks there - so they would rather spend their money on a new phone than a PC.
2. Even with new OS capabilities like MS Hello, Ink, Touch, etc - only a small portion of folks actually use those capabilities - so there is no major catalyst to go buy a new PC. Even with 2 in 1 formats, etc.
And even though Windows 10 for example is seeing it's percentage of all Windows machines growing - some say as high as 20% - so finally killing off Windows XP, Vista and Windows 8 - the vast majority of that growth has come from folks upgrading existing PCs - not buying new ones. MS recently published that some 270M users have migrated to Windows 10 which reinforces that fact.
Similarly while all the new technologies available in modern PCs like 802.11ac, M.2 SSD, DDR4 RAM, Touch Screens are available - for many folks all those new capabilities are relatively mute because many users are not really pushing their PCs today. Meaning what they have is "good enough"
As I've mentioned in other posts - the vast majority of my PCs are at least 5 years old with some being 7 & 8. I simply did some simple component upgrades like SSD, WiFi and video cards and was able to run Windows 10. In most cases those upgrades ranged from as little as $35 to maybe $150 total. Since I rarely run any apps that push my CPU or GPU those small upgrades have added years to my potential ownership term.
I have also experienced extremely good reliability will all my devices. Knock on wood I have not experienced any form a device or component failure in years. A lot of that reliability has to be attributed to modern design and assembly of the components themselves. MTBF for components like HDDs range from 100K to 1M hours - so from 11 to 110+ years.
So with all that said, there are new features in Windows 10 like Windows Hello and the newly announced Ink capabilities that could potentially be a catalyst to purchase a new PC. But that is if you actually are planning on using them - so meaning nice to have vs need to have.
And I think that is part of the problem. When you look at the primary use cases for many PCs, it's browsing, some LOB apps, Office and media like photos, video and music.
So the will I use touch or Ink or image based security capabilities question and will they fundamentally change the way I use computing are in play
Today that can be a tough question to answer. Touch is certainly in play with tablets and I use it regularly. But not at all on my all-in-one - since it doesn't provide that great a value.
Same can be said with Ink. Yes I use it on a tablet with a stylus for apps like OneNote and occasionally as a mouse pointer, but outside of that not much.
Bottom line is this. While new PCs have faster processors and RAM, improved storage, better graphics and networking along with advanced features like touch, ink, cameras, etc - they are seeing massive competition from mobile phones and tablets and will most likely continue their sales decline in the coming years.
Worldwide - PC sales declined 11.6% to 60.5M units down from 68.4M in Q1 of 2015. That is a faster rate of decline than the 10.5% decline in 2015. Across the big 5 - Lenovo, HP, Dell, Apple and Asus declines ranged from 2 to almost 11%. The remaining vendors saw declines of nearly 20%.
In the US - there was a smaller decline of 5.8% to 13.6M units down from 14.4M in 2015. What is interesting is that the battle here in the US is about market share.
Some vendors like Dell, Lenovo and Apple saw market share growth ranging from 5% - nearly 22% while others like HP saw a significant decline of 14%. Similar to Worldwide numbers - the "Others" category saw a significant decline of nearly 25%.
What this means to me is that the PC market is consolidating - meaning many of the smaller "whitebox" vendors are failing and that the big 5 will be taking share from that market. Worldwide that is nearly 18M units and 2.3M here in the US.
Today's new PCs and laptops are the fastest, most reliable devices ever made with great form factors, excellent graphics and fast networking. Consumers also have excellent breadth of choice from entry level PCs under $300 to high end ultrabooks with 4K displays, pens, cameras and 1TB of SSD storage.
But even a very compelling hardware base - sales are still declining. Why ?
To me two reasons.
1. Mobile - Folks are spending more time on their phones and doing more of their day to day tasks there - so they would rather spend their money on a new phone than a PC.
2. Even with new OS capabilities like MS Hello, Ink, Touch, etc - only a small portion of folks actually use those capabilities - so there is no major catalyst to go buy a new PC. Even with 2 in 1 formats, etc.
And even though Windows 10 for example is seeing it's percentage of all Windows machines growing - some say as high as 20% - so finally killing off Windows XP, Vista and Windows 8 - the vast majority of that growth has come from folks upgrading existing PCs - not buying new ones. MS recently published that some 270M users have migrated to Windows 10 which reinforces that fact.
Similarly while all the new technologies available in modern PCs like 802.11ac, M.2 SSD, DDR4 RAM, Touch Screens are available - for many folks all those new capabilities are relatively mute because many users are not really pushing their PCs today. Meaning what they have is "good enough"
As I've mentioned in other posts - the vast majority of my PCs are at least 5 years old with some being 7 & 8. I simply did some simple component upgrades like SSD, WiFi and video cards and was able to run Windows 10. In most cases those upgrades ranged from as little as $35 to maybe $150 total. Since I rarely run any apps that push my CPU or GPU those small upgrades have added years to my potential ownership term.
I have also experienced extremely good reliability will all my devices. Knock on wood I have not experienced any form a device or component failure in years. A lot of that reliability has to be attributed to modern design and assembly of the components themselves. MTBF for components like HDDs range from 100K to 1M hours - so from 11 to 110+ years.
And I think that is part of the problem. When you look at the primary use cases for many PCs, it's browsing, some LOB apps, Office and media like photos, video and music.
So the will I use touch or Ink or image based security capabilities question and will they fundamentally change the way I use computing are in play
Today that can be a tough question to answer. Touch is certainly in play with tablets and I use it regularly. But not at all on my all-in-one - since it doesn't provide that great a value.
Same can be said with Ink. Yes I use it on a tablet with a stylus for apps like OneNote and occasionally as a mouse pointer, but outside of that not much.
Bottom line is this. While new PCs have faster processors and RAM, improved storage, better graphics and networking along with advanced features like touch, ink, cameras, etc - they are seeing massive competition from mobile phones and tablets and will most likely continue their sales decline in the coming years.
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