The Decline of the PC - Not a Time to Mourn but Rather a Time to Celebrate

By Tony Rizzo May 29, 2013

Just over a month ago, we did a little exploration of the PC marketplace courtesy of IDC and a report it published based on preliminary data that essentially noted that the PC market is in a state of slow decline. As we noted in our own "decline of the PC market" commentary, there is hardly any surprise here - the PC market is a long-mature industry that is now saturated. We also noted that the "decline and urgency of concern for a dying industry" was greatly overstated and was being needlessly exaggerated.

The PC market was not -and is not - dying. It is merely finding a new equilibrium within a world of new technology that includes smartphones, tablets, Ultrabooks and eventually some chromebooks. This is how hardware lifespans function in the real world. There is much too much noise suggesting that PCs are about to go the way of the minicomputer - but this is simply not the case.

That said, we are now about six weeks down the road from IDC's original report based on preliminary data, faced with a just-released and updated report based on apparently final Q1 2013 data. And, once again, the pundits are out there freshly armed with new data points once again suggesting that the PC will go the way of the minicomputer. We'll quote a PC Magazine article to set the stage of what we mean here: "The long, slow bleeding out of the PC market is going to explode into full-on hemorrhaging in 2013."

That statement is based what IDC is now predicting for the rest of the year based on its final data for Q1 2013. The research firm now believes - and predicts - that PC shipments will decline 7.8 percent in 2013, which is almost nut not quite double the 4 percent drop IDC measured for all of 2012.

Immediately below is IDC's chart that we posted with our story from six weeks ago. It does in fact point to a likely fairly steep decline though as we noted in our earlier story it isn't nearly as "disastrous" as it might look.

IDC's new chart is shown below, and quite honestly, what we see here in no way, shape or form matches the quote from the PC Magazine article.

In fact, we believe that the chart above specifically shows nothing more than the inevitable - a mature industry that is finding its next level of equilibrium against all the newcomers on the block. Yes, there is a decline, and yes, the PC industry's growth cycle is over. But let's be clear about the numbers - by 2017, global PC shipments are anticipated by IDC to drop to about 333 million shipped units. That total is obviously less than 2012's 349.2 million and 2011's 363 million units shipped. But it also happens to be more than the 321.9 million units IDC is forecasting will be shipped this year.

PC Sales Decline is a Balancing Act

The entire market out to 2017 actually looks pretty damn flat to us. As we've said a number of times now, the entire PC market is merely finding a new equilibrium point. And even so, 333 million units shipped in 2017 is still a rather hefty number.

Technology shifts all the time - did anyone really not anticipate that new technology would require the hardware manufacturers to move with the times? Of course, Dell messed up and failed to do so. And Hewlett-Packard was a laggard in figuring this out - though the company is at least likely to recover eventually and begin to backfill the decline in PCs with the very same types of hardware that are driving the PC decline.

Eight to 10 years down the road, we can certainly expect most if not all desktop PCs to have disappeared, and there will be no laptops that aren't well under two pounds - and all of them will be packing enormous computing power but running at super-efficient electrical power - hugely less than what has been possible up until today. Intel is certainly committed to deep power savings and it will happen. And if a EUROCOMM can deliver a supercomputer in a laptop format today, less than a decade from now we will certainly see them in a tablet format. It's inevitable.

The only mystery here isn't that the shipment of PCs is in a state of decline and that the industry's growth is over, but that so many manufacturers have failed to roll with the punches. Again, Dell is the greatest example of this - and it is not likely to recover. Others - like HP - will begin rolling with the punches and will survive mostly intact.

Down the road a ways, laptops will still own a huge chunk of the market, but they will be nothing more than a part of the overall mix of technology. Once smartphone technology reaches the point of fitting neatly into a smart watch format (keeping the issue of screen size out of the equation), will the headlines be reporting a similar smart phone bloodbath? No doubt they will. But all it will really be is the inevitable and inexorable march of technology into new form factors - in this case wearable tech and malleable, super lightweight screens that can be unpacked and unfurled from tiny spaces into large screens.

The decline of the PC market is not to be mourned - it is to be celebrated!

It means that technology is thankfully advancing. And that is something we will always greatly benefit from.

Edited by Alisen Downey

TechZone360 Senior Editor

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