There Is No Magic In Numbers Of PCs Shipped

IDC has forecast 10%+ annual growth in PC shipments from here on despite an observed lack of growth this year. IDC counts only desktops and notebooks as PCs. This year’s slump is almost completely due to the rise of smart phones and tablets. Even at the high initial prices of these products the impact was serious. With prices continuing to fall in smart thingies this trend will continue. IDC has it wrong. This is the year the Wintel monopoly died. Consumers now can choose other than Wintel and are doing it by the hundreds of millions.

IDC predicts 2011 will essentially see no growth over 2010 in shipments but magically sees the return of 10%+ growth thereafter. There is no magic in PC shipments. There is no magic in shipments of smart thingies. People want smaller, cheaper and faster machines and they will get them from any source. That retailers and ISPs and telcos and banks are pushing the smart thingies makes it all the more sure that consumers will gobble them up. Only business clings to the older technology because it works for them but consumers are the workers and seek to use the same gadgets at work. Even businesses are buying more thin clients (IDC still counts them as PCs) so the ASP of PCs will fall everywhere. This will squeeze the already squeezed OEMs and they will resist M$’s demand to keep licensing fees up.

Old friends of Wintel will see smart thingies are more profitable than declining prices of the old thingies and the slide will continue. There is no reason to ship goods that don’t sell. They might do that for this year, but as Acer discovered, the chickens come home to roost eventually. The other OEMs will learn from Acer’s example.

I see sales of smart thingies doubling in the near future and shipments of desktops and notebooks will be stagnant at best. Business and consumers will switch away from Wintel. It will be a gradual shift this year but will become a torrent next year. M$’s “8” will come at least a year late to affect the shift. Once headed on the road to freedom, a huge share of the market will be lost to Wintel. Both M$ and Intel have strategies to catch the wave but hundreds of millions of users will switch to ARM and more will switch to Android/Linux or GNU/Linux. There is no way for Wintel to put th genie back in the bottle.

I have no idea what the new equilibrium will be. Likely most consumers will find smart thingies attractive and useful so that share will be huge. In business, folks who type a lot will still prefer Wintel but even they may find thin client computing useful. They can use that other OS and familiar apps from a GNU/Linux thin client for lowest cost per seat. If they are using OpenOffice.org or LibreOffice and FireFox or Chrome, they may just as well switch to GNU/Linux on the terminal server when that shift happens.

There is no upside for Wintel on desktops and notebooks. IDC is whistling past the grave yard.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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15 Responses to There Is No Magic In Numbers Of PCs Shipped

  1. Ray says:

    I’ve heard that cell phones, with texting features are connecting people to the world.

  2. The emerging world is skipping copper and using wireless. Many farmers and entrepreneurs start by using the Internet to keep track of markets and optimizing their income. Knowledge is a powerful tool for earning money. Youth are using the web to organize rebellion in the Arab countries. They use the web to earn a living elsewhere. China, alone, has a billion people still not on-line but the schools are showing them how. Africa is still a dark spot on the web but local networks are all over the place.

    In the past year there were very few small cheap computers available by the standards of these emerging markets. China gave $billions to rural folk to get them engaged with the national economy. Prices of entry-level products are getting closer to $100 so the opportunities for emerging markets to absorb products has probably doubled. Demand still greatly exceeds supply.

  3. oldman says:

    “The option to own several kinds of PCs is not characteristic of the emerging markets. Youth/poor will buy one small cheap computer or share one.”

    Pog, it would seem to me that anyone who is that poor is going to be more concerned with keeping body and soul together than with gadgets and surfing the internet. Assuming that they have an infrastructure that can even support surfing the internet.

  4. Ray says:

    “The option to own several kinds of PCs is not characteristic of the emerging markets. Youth/poor will buy one small cheap computer or share one.”

    Nah, I’ve seen people carrying an ipod touch, and a phone. If they do that, then chances are, are that they’d have multiple devices.

  5. Wikipedia stats, May 2011: iPhone 2.94%, iPad 0.99%, Android 1.19% = 5.12%

    Last month: iPhone 2.89%, iPad 0.90%, Android 1.12% = 4.91%

    So, it’s not a glitch. People are using their gadgets to settle arguments in restaurants… They probably are not entering long articles but they can read lots. On this blog there are about 20 readers for every commenter, so that’s about right.

    Check out this texting champion… http://www.youtube.com/watch?v=kpnHK0Fp6tI

  6. Contrarian says:

    “Screen size and keyboard have nothing to do with “intensity”. A smartphone can connect to those devices quite well.”

    I think that something as simple as posting in this forum is a real tussle if you have to use a touch screen on a smart phone to enter your thoughts. Perhaps I am too old fashioned in this regard, but that is my opinion.

    Another thing to consider is that, even with the hundreds of millions of Android and iOS devices sold and in use today, the percentage of web accesses to the sites monitored by the statistical reporting services show a disproportionally low use of the smart phones in this role, suggesting that people are still mostly using computers for general web access even when they use a phone or tablet for email or other apps.

  7. There’s a good discussion of this phenomenon here. Several large players cannot agree on what degree of cannibalization will happen. M$ is saying one thing and doing another by making “8”.

  8. The confusion about PC predictions seems to stem from the assumption that many make here that one must have a tank to drive to the corner store because tanks exist.
    “Tablets can be used instead of PCs to watch media and communicate as well as for virtual desktops or thin clients, said Raphael Vasquez, research analyst at Gartner. But in the long-term these devices will “complement” PCs, which remain a better alternative for intense computing activities.”
    see Gartner Lowers PC Shipment Growth Forecast for 2011

    The market seems to bear out the falsity of that statement. People do not use PCs for intensive computing mostly so small cheap computers will do very well. Screen size and keyboard have nothing to do with “intensity”. A smartphone can connect to those devices quite well. I predict small cheap computers will continue to take a bite out of PC shipments for the foreseeable future.

  9. It might be instructive to look at IDC’s former predictions. In 2008 they forecast world shipments of PCs as 368 million for 2010 and 398 million for 2011. They now state that 2010 shipped 347 and predict that 2011 will ship 361. It appears they tend to be optimistic by about 10%… That’s not bad for predicting any numbers in IT but I would take their 10% numbers with a grain of salt/skepticism.

  10. Ubuntu seems lost. They are making good headway with desktops and notebooks but few OEMs are putting Ubuntu on small cheap computers. That’s where the big easy growth will be.

  11. Agreed. 10% growth is pie in the sky when you consider that some computing will be done with thin clients and other small cheap computers from now on in. Many businesses are switching to thin clients that may last 10 years even as they adopt “7”. Expect a lot fewer business PCs to be bought in the future. Thin clients are a global phenomenon.

  12. The option to own several kinds of PCs is not characteristic of the emerging markets. Youth/poor will buy one small cheap computer or share one.

  13. Richard Chapman says:

    To think that Microsoft doesn’t peddle influence, how should I put it, is perilous at best. Microsoft and IDC are best buddies. They go to bed with each other every night. You can take that money to the bank. IDC pushes numbers for Microsoft. Every time. Two kinds of people believe otherwise. One of them is a fool.

  14. Contrarian says:

    What do you think of Apple’s Lion OS? Things are a little sketchy, but they seem to be going in the same direction as announced by Microsoft for Windows 8. These new OS’s will integrate the apps from phones and tablets with the more conventional windowed forms from the prior versions. I think that the Linux distributions need to get on that track or they are going to be left in another tail chase.

    Ubuntu’s Unity stuff sort of looks in that direction, but I don’t think that the touch stuff is part of that. Maybe Android will get with the new trend.

  15. Contrarian says:

    IDC has been in the market survey business for quite a while, so trying to second-guess their predictions is perilous at best. One thought that I have is that the smart phones and tablets are great for mobile access to the internet for viewing something, but they are next to useless when it comes to transacting anything that is the least complex. Tablets are much better than phones due to the much larger screen real estate, but they still suffer from poor input capability and the navigation limitations of touch and gestures makes a lot of tasks tougher due to the lack of precise selections.

    Bottom line to all that is that they do not effectively replace “conventional” computers or even netbooks in that role and I think that it is likely that people will simply own both. The service companies such as ATT and Verizon seem willing to underwrite the price of smart phones and even tablets with the purchase of service subscriptions, so there isn’t much of an affordability issue when an iPhone and a computer cost about the same now as a regular cell phone and a computer cost last year.

    PCs suffered some loss when some of the money that might have gone to PC purchase went to smart phone and tablet purchases of early adopters, but as the rest of the world fills in, there is not so much impact on people’s budgets.

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