Both IDC and Gartner Agree Growth in PC Sales is Modest

In a typical year, growth of PCs shipped would be of the order of 10%. According to IDC growth in 2Q 2011 was 2.6%. According to Gartner it was 2.3%. That should impact M$’s PC segment to be released next week. In the meantime growth for producers of Android smartphones has been phenomenal.

Are OEMs of PCs going to risk dragging along like this forever? Nope. They will look for platforms with further opportunities for growth, small cheap computers. Expect thin clients and tablets to be exploding this year. Anything that leverages the network to enhance performance rather than placing expensive resources at hand will do well because it maximizes the return on investment, keeping valuable resources working at capacity all day long while a minimal PC idles in front of us.

Part of the reason for the lackluster growth in PC shipments? Retailers are making space on shelves for smart thingies. Globally, more smartphones and tablets will ship this year than Wintel PCs. In the USA, Apple’s iPad is down to 55% share of retail shelf-space for tablets. At the same time Apple’s Macs are at 11% share in the USA. The whole world is seeing alternatives they did not see only a couple of years ago.

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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22 Responses to Both IDC and Gartner Agree Growth in PC Sales is Modest

  1. oldman says:

    “Contrarian so why do Dell sell $2000+ workstations cases with Redhat Linux.” Because they are selling into the academic/scientific workstation market. The people in this market generally know what they are doing Linux-wise, and as a result need little hand holding beyond break/fix.

    These people also tend to get High end stations (Dual socket, memory expansion to 64Gb, etc.).

  2. Contrarian says:

    “That’s clearly a case of marketing/distribution distorting the market just as Wintel does”

    I guess a tonne is 1.1 tons, #pogson. Is Canada really metric or is that just a put-on? In any case, I doubt that anyone would want to market sulphur in bulk like that. I would imagine that there are environmental laws regarding shipping and storage and such as well as the inconvenience to the user. I am not much of a gardener, but I do get around the nursery now and then and no one sells it like they do fertilizer and mulch. If there was much of a need, I am sure that it could be marketed in 50 lb bags like fertilizer. If it is marketed in a 2 ounce package, you must not need much of it for common tasks.

  3. I do buy dried peas 10kg at a time. I need that about once a year. When I am in the North, my cost for food is about $3/day, much less than when I am in the South and my wife shops… I use a pressure cooker which permits making pea soup in about 10 minutes, warm-up and cool-down included.

    Site accesses are not a good measure of absolute share. No site or collections of sites matches global usage. We do know there are more poor people in the world than rich people. That can mean that most PCs are purchased by rich people but it also means that more small cheap computers sell than big expensive computers. There are exceptions. Sulphur, which I use for horticulture, is one of the least expensive substances on the planet. Water is cheaper. Dirt is cheaper. Still with the world price of sulphur measured in $100+ per tonne, people are buying sulphur in small containers for $2/100g, about $20000/tonne. That’s clearly a case of marketing/distribution distorting the market just as Wintel does. While we can replace an ATX box with OS for $200, people are paying $300+ not because they prefer that but because the cheap ones are often not on the shelves.

  4. Contrarian says:

    “The rest of us will make our own budgets”

    What you need to do is figure out the relative sizes of us spendthrifts and you prudent folk. If you want to match it to internet site accesses, it would appear that the prudent/austerity side has about 1% and we wastrels the other 99%. Note that I include the percentage of us who spend a lot of money to get a smart phone when we could just continue to use our old cell phone and computer.

    Do you really buy 22 poundss of dried peas in one fell swoop? They are good for making split pea soup, but I can’t imagine what else. Around here we vary the soup making from the leftover ham bones among split pea, navy bean, and 7 bean versions, about one every other month. I think that 22 pound would last us a very long time, certainly longer than I keep any one computer.

  5. “Enjoyment”? IT is not only about enjoyment. It’s about getting things done. If you do IT more cheaply, you can have more IT for the same money or you can spend less. It’s your choice. Where I worked last year, students got much more enjoyment from 8 year old PCs used as thin clients than expensive new PCs running that other OS. Cheaper IT can be better than expensive IT.

    I am often shopping for IT. Often I see a good basic PC selling for half the price of “better” models. I can add a hard drive to the base model and exceed the performance of a machine costing twice as much for $50 or so. Clearly up-selling happens and you are addicted to it. Buy useless stuff if you want. The rest of us will make our own budgets.

    I can recognize equivalent products where I shop and I do buy the cheapest product that meets my needs, for example, I buy dried peas in 10kg sacks for $7 instead of 450g bags for $2. The product likely comes from the same fields but reaches me by different routes. The same can be said for IT. Often components for the cheap product and the expensive product come from the same supplier.

  6. Contrarian says:

    As I said, #pogson, I am talking to a stone here. You have a fixation with saving money and I would rather have greater enjoyment. I didn’t buy the cheapest house that offered adequate shelter, I didn’t buy the cheapest car that could take me to my destinations, I didn’t buy the cheapest HDTV, and I didn’t buy the cheapest computer that I could get by with. I don’t buy the cheapest cut of steak, the store brand canned goods, or wine in a box either.

    Do you? I am sure that you do not, in spite of your attitude. You should consider that the majority of computer tech buyers are not looking for the cheapest way but rather for the most satisfying way. For you, that seems to be any old way that spits in the Microsoft eye, but for the rest of us, the choices are much more varied.

  7. The value of a basic personal computer is immense. The incremental value of some feature or other above basic is very hard to justify on a price/performance basis.

    For example, many motherboards these days use SATA. One can buy a “premium” motherboard with six connectors. You obviously get a better motherboard but it is silly to do so if you are only going to run a single hard drive as most PCs do these days. My Beast can run 6 but I only have 3 in it at the moment and it is shut down for repairs at the moment. The number of hard drives ordinary users of PCs are willing to pay for is another indication that people want small cheap computers no matter what you say. Makers of hard drives were shipping 70-80 million hard drives per quarter when OEMs were shipping a similar number of PCs. I know from experience that one or more additional hard drives really improves the performance of PCs simply because there are more heads in the storage system so you get a huge increase in performance for an additional $50 but few people do that because they don’t want to spend the $50. So, people do want cheap computers. Even the cheapest modern computer is likely to be much faster/more capable than the typical owner’s current PC.

  8. Contrarian says:

    I am obviously failing to reach you, #pogson, but I never really expected that you would see the other sides of your world. Your absurd vignette shows your lack of understanding. I say that people do not want the cheapest products and you seem to take that to mean that they want to simply pay more for the same thing and you think that is silly. Well, it would be, but the fact that you see a quest for something better as a quest for simply a higher price seems more significant.

    When the grocer offers a cheap loaf of bread you apparently take it after some effort to “haggle a lower price”. Others, I believe, would look for a better tasting, richer loaf, perhaps at a delicatessen/bakery. The cheap bread is for the losers, they say, give me something finer, they can afford it.

  9. Contrarian wrote, “The customer does not really want small, cheap computers or the lowest cost of IT.”

    Contrarian at the Grocery Store:

    C (to clerk): This bread is too cheap. Have you nothing more expensive?

    clerk: You could pay for two and I will give the other loaf to charity…

    C: That’s still too cheap. Why don’t I pay for three and only take one home?

    clerk: OK.

    C leaves with his expensive loaf.

    clerk to self: Wow! Now I’ve seen everything. 50% of our customers try to haggle a lower price. Guy must be nuts…

  10. Contrarian says:

    I think that it is the best way. The customer does not really want small, cheap computers or the lowest cost of IT. That is the same thinking that brought about many Yugo dealerships a few decades ago. As it turned out, customers wanted a rich, rewarding experience and pinching pennies and doing without the luxuries is not the way that they really want to go.

    It is fine for minimalists like yourself, of course, but do not make the mistake of generalizing you own experiences which are not necessarily very mainstream or likely to be shared by many others.

    Smart phones are successful, not because they represent a small, cheap computer, but rather they represent a maximum effort cell phone with a lot of whistles and bells. You have the bull by the wrong horn, I think, and are likely to get stepped upon in the process.

    Dditto the iPad. People buy them to have something extra for on-the-go that even the iPhone does not provide. I doubt that you could find a single iPad owner who did not also have a laptop and probably a smart phone, too.

  11. Contrarian wrote, “As to the term “bribe”, you are mistakenly referencing the legitimate co-marketing agreements that have been blessed by courts in the USA and Europe. Nothing illegal, immoral, or unethical about teamwork, #pogson. That is the best way and is mutually beneficial and win-win all the way!”

    This is not the best way to provide what the customer wants, small cheap computers or lowest cost of IT.

  12. Contrarian says:

    “Dell sells workstations with GNU/Linux”

    But you have to search to find them, just like the other vendors who may offer Linux pre-installed systems under the covers. If you come in the front door, all you see at Dell is Windows 7 based workstations (at the same price as what you pay for a Linux machine without Windows 7 Pro.

    There is a difference, I think, between the terms “sells” and “offers for sale”. The latter applies to Linux in selected circumstances whereas the former is used for the Windows based products at Dell.

    As to the term “bribe”, you are mistakenly referencing the legitimate co-marketing agreements that have been blessed by courts in the USA and Europe. Nothing illegal, immoral, or unethical about teamwork, #pogson. That is the best way and is mutually beneficial and win-win all the way!

  13. They probably would not get their bribe from M$ if they did that.

  14. Dell sells workstations with GNU/Linux. Judging by the video cards, they are not intended to be servers…

    see Dell Precision T7500N

  15. Contrarian says:

    “so why do Dell sell $2000+ workstations cases with Redhat Linux”

    Because there is a strong market for Linux servers that replace much more costly Unix servers. There is a strong market for Windows servers as well, for the exact same reason. The market for Windows servers is about four times greater than the market for Linux servers.

    But we were talking about desktop/laptop/mobile clients, #oiaohm. The server market is not an issue here.

  16. Contrarian says:

    “It looks like people are demanding Ubuntu/Linux.”

    If that were so, Monclick would put those machines on their top pages. But you have to use a search engine to find them instead. That “demand” is pretty small.

  17. oiaohm says:

    Contrarian so why do Dell sell $2000+ workstations cases with Redhat Linux.

    Linux world you are either rich and can afford a 8000 dollar computers or poor. Their is not much in the middle. Middle ground we convert windows PC’s.

  18. linux finds a whole bunch of GNU/Linux pcs. Desktop, notebooke, netbooks,…

    Check out this page.

    You can get there just searching their site for a PC and choosing Linux as a search option. Cool. They have products from Acer, Fujitsu and Via.

  19. The site has a search function that works. Searching for Linux finds two software packages. Searching for Ubuntu finds the products in question. It looks like people are demanding Ubuntu/Linux.

  20. Contrarian says:

    “Contrarian there has been something interesting”

    Well, why don’t you go to the Monclick home page and see how many Asus notebooks and netbooks are offered and how easy it is to stumble across the Linux version. The Linux machine, like the ones at Dell and HP are hidden on back pages and only the Linux fans seem to know how to find them. Even then, there is not much purchase activity and the units offered are always the bottom of the barrel in terms of features and functions and performance.

    The message being sent is loud and clear: “Buy a Linux computer if you are an extreme techie tightwad who cannot afford anything better!”

  21. oiaohm says:

    Contrarian airports introduced wifi. Lot of people now use their phone to skype or equal instead of using a pay phone. Introduction of mobile phones did not do in payphones in airports. The introduction of wifi + sip techs + mobiles phones that did in payphones in airports. Remember mobile phones are not exactly new. Lot of business men use to travel with the bag mobile phones before we got the pocket sized ones. Price of calls it was cheaper to use the airport pay phone than the mobile so the airport pay phones were required. Wifi changes that. Its cheaper to use the Wifi than the airport pay phone. Yes the disappearance of airport payphones normally almost exactly lines up to when the airport introduced Wifi hotspots + 3 months. When someone goes around the pay phones looks at the income from them and the repair bill for repairing the damage to them. No longer cost effective to have so many after Wifi hotspots.

    Yes your presume was badly wrong.

    Contrarian there has been something interesting. Return rate on Linux netbooks sold correctly is less than Windows. Also number that have ended up scrapped has also been zero. This say the market has never been saturated so we have no clue how large the market is. Percentage of all windows laptops and desktops produced new end up going to destruction and never sold.

    Let me explain how it gone. OEM ships a Linux laptop they sell like hot cakes. Microsoft reduces license cost to OEM’s to stop selling Linux.

    Yes shocking. It always been a case of running out of supply and OEM not making enough Linux devices to suit demand.

    Issue is kick backs. You don’t get kick backs from crap software on the Linux devices. There are issues more than just user hate.

  22. Contrarian says:

    “Are OEMs of PCs going to risk dragging along like this forever?”

    I do not think that they have much choice in the matter, #pogson. Their business is selling personal computers to people who use them on the order of several hundred million units per year. That is their business and that is what they will continue to do.

    All markets gradually mature and settle into a sort of stasis that amounts to a long period of decline as substitute products are found to replace old ways. The cell phone has substantially replace conventional telephone service in many cases. Do you remember the thousands of pay telephones that lined the walls in every airport concourse just 10 years ago? They are almost all gone today and you have to look hard to find one. They are usually near the restrooms now. Or a corner pay phone in a booth? Seen any lately?

    You are correct in suggesting that a lot of on the go people will adopt the smart phone and/or tablet in lieu of toting a laptop in many cases, but it seems to me that, at the current time, that does not mean that these people are ridding themselves of their laptop or desktop machine.

    Sales of laptops and desktops continue and they are mostly Windows laptops and desktops. The OEMs have no choice in the matter since Apple doesn’t allow for cloning and the population will not buy a Linux laptop or desktop in any volume as has been proven time and again. Windows laptop and desktop sales volume is even increasing, if you believe forcasters.

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