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PC vendors “flailing” as sales forecasts tumble


By Stewart Mitchell

Posted on 8 Sep 2011 at 09:00

PC manufacturers face a testing two years as a changing technology landscape throws their business plans into chaos, according to research from Gartner.

The warning comes as the company slashed its sales growth projection for 2011 from 9.3% to only 3.8%, with global sales expected to hit a total of 352 million units.

A combination of changing tastes, pressure from other gadgets such as smartphones and tablets and an increasing sense of the PC as a long-life item have all conspired against manufacturers, according to the analysts.

Unfortunately, the resulting chaos is just creating more confusion across the entire PC supply chain, impacting sell-in

"An increasingly pessimistic economic outlook is causing both consumer and business sentiment to deteriorate,” said Ranjit Atwal, research director at Gartner, adding demand for PCs was falling across all age groups.

"More worrisome for the long term is that Generation Y has an altogether different view of client devices than older generations and are not buying PCs as their first, or necessarily main, device," he said.

“For older buyers, today's PCs are not a particularly compelling product, so they continue to extend lifetimes, as PC shops and IT departments repair rather than replace these systems."

Manufacturer rethink

The big question for the industry is how manufacturers react to the changing tastes of end users, and how many might follow HP's lead and consider quitting the business altogether, a situation that is casting still further uncertainty across the market.

"Media tablets have dramatically changed the dynamic of the PC market and HP's decision to rethink its PC strategy simply highlights the pressure that PC vendors are under to adapt to the new dynamic or abandon the market," said George Shiffler, research director at Gartner.

"Vendors' tried and true business models are failing as traditional PC functionality is extended to other devices, and users continue to lengthen PC lifetimes.

"Vendors only seem to be flailing as they look for quick fixes to their problems. Unfortunately, the resulting chaos is just creating more confusion across the entire PC supply chain, impacting sell-in."

The company also cut its sales growth forecast for 2012, from 12.8% to 10.9%, but said even that figure was boosted by the weak forecast for this year.

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User comments

Weather forecast looks bleak

Go get yourself an umbrella - no sod that why not a new mac instead. No - we all bought new PC's last year - and we're happy with them - the truth :)

No news days are repeat the old news day stories.

By nicomo on 8 Sep 2011

Bound to happen

Even ignoring tablets and the recession, a slowdown in PC sales was inevitable.

We long since passed the point where there was a rapidly expanding user base and we have now passed the point where most people have realised that their current kit already has more power than they need.

So we have reached a point where the market for PC's was always set to diminish. Add to that the recession and tablets for people who really needed tablets but had to buy a PC and things will not be looking too rosy for PC manufacturers.

By qpw3141 on 8 Sep 2011

For me it has been more a question of quality. Things are picking up now. But until recently it was one plastic laptop after another with poor specs. Unless you bought Apple or dare I say Alienware nothing seem engineered or special. Just to thin plastic boxes with a hinge. The new ultrabooks look great. And I am really looking forward to Samsung's Series 7.

What I really want though is a 17" touch screen laptop with an ARM processor running Linux. :)

By rocketdog on 8 Sep 2011

Digital champion meet PC manufacturers"

But lets not forget that there is a potential market for PCs in the "nine million Britons who are not yet online - 6.4m of whom are over 65". :)

By chapelgarth on 8 Sep 2011

I'd love a new laptop, I just can't afford it.

By JamesD29 on 8 Sep 2011

A little perspective

We are, after all, only taking about a reduction in growth (not a reduction in overall sales). It's all relative. Sales will still be increasing by 3.8%. If that was our economy, we'd be celebrating!

By paperwire on 8 Sep 2011

One problem for Windows PCs is the focus on corporate sales. When economies were booming this guaranteed sales each refresh cycle, and PC makers got lazy. All they needed to do was screw a few parts together and ship them - no careful design needed, no innovative manufacturing processes, no long term planning, no expensive research.

That's changed because for a number of years now corporates have had to be a lot more careful with their bottom lines, so have bought fewer new PCs and kept them for longer. That leaves the home user market where Apple has been far more dominant with its Mac range than it can hope to be in the workplace where Windows reigns (and will continue to do I suspect).

When consumers are private individuals and not corporate buyers, Macs are chosen far more often which is why in current market conditions Mac growth is bigger than Windows PC growth. Because Apple have reinvested their profits into research and can now produce computers at a price the PC box shifters can't touch (iPad, MacBook Air/Ultrabooks) all this money spent on research, manufacturing, reusing identical components such as RAM, processors etc across the range the economies of scale are paying off.

For ultrabooks, the PC makers are even struggling to match the metal unibody Mac Book Airs on price using PLASTIC!

By SwissMac on 10 Sep 2011

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