Consolidation in struggling PC market considered 'inevitable' as sales plummet

Posted:
in Current Mac Hardware edited January 2014
As the PC market continues to shrink even after the heavily hyped launch of Microsoft's Windows 8, consolidation among hardware makers and an industry-wide shakeup is likely "inevitable" in the coming years, according to a new analysis.

PC
The top five PC makers in the U.S. by market share last quarter, according to IDC.


Maynard Um with Wells Fargo believes the latest PC sales data from IDC, released this week, is the strongest indication yet that the PC market is in line for a major shakeup over the next few years. He sees an industry with more share consolidated among even fewer competitors.

The latest data from IDC showed that PC sales declined 13.9 percent year over year in the first quarter of 2013. That marks the worst year-over-year slip on record.

Apple saw its domestic sales slide 7.5 percent in the three-month span, according to IDC, suggesting that the Mac platform is in stronger shape than the overall PC market, though still also on the decline. However, IDC's data does not include international sales, which Um believes are likely growing faster than the U.S.

"While unit decline reflects Apple is not immune from the slowdown, it, unlike its peers, is at least participating in the tablet market," he said. "While new entrants offering low priced tablets are causing some share shifts, we believe Apple will continue to dominate dollar profit share ? more than half of the industry profits despite 10 percent share."

PC Estimates
U.S. shipments in thousands of units. | Source: IDC


Outside of Apple, Um expects to see a "markedly different" PC landscape in a few years, with fewer companies controlling larger shares. But in the interim, with no signs of immediate consolidation or industry rebound, Um believes the PC market will "continue to feel pain."

For the industry to reverse its downward trend, the analyst believes two major shifts need to happen. First, tablets will need to reach a level of market saturation, thus allowing consumer dollars to shift back to traditional PC purchases.

Secondly, Um believes pricing on PCs will need to become "materially more attractive" for the new touchscreen and ultrathin devices that debuted late last year along Microsoft's new Windows 8 operating system. At the moment, he believes these design shakeups are just too expensive for the average consumer.

The big winner in the March quarter, according to Um, was Dell, which gained 100 basis points of market share sequentially from the holiday quarter. He believes the company's gains may have been a result of its focus on retaining strategic share, which could have affected its pricing and margins.

The continued struggles seen in the PC market were predicted by late Apple co-founder Steve Jobs in 2010, when he said the debut of the iPad signaled the beginning of a market-wide transition to a post-PC era. At the time Jobs believed that traditional PCs would remain, but their presence would be diminished over time as fewer users would need their specific abilities.

"The transformation of the PC to new form factors like the tablet is going to make some people uneasy because the PC has taken us a long ways," Jobs said at the AllThingsD conference. "The PC is brilliant? and we like to talk about the post-PC era, but it's uncomfortable."
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Comments

  • Reply 1 of 66
    tallest skiltallest skil Posts: 43,399member


    Of course, Apple will suffer for this, despite being the one to cause it all via the product that is singlehandedly killing Middle Modern computing.

  • Reply 2 of 66

    Quote:

    Originally Posted by Tallest Skil View Post


    Of course, Apple will suffer for this, despite being the one to cause it all via the product that is singlehandedly killing Middle Modern computing.



    Along with reaping a big portion of the profits of both traditional PCs and tablets. Yet somehow, still d00med.

  • Reply 3 of 66
    bdkennedy1bdkennedy1 Posts: 1,459member
    I think HP is done and will either be bankrupt or bought out by 2015. Toshiba and Lenovo are smart and small enough to continue on in some way.
  • Reply 4 of 66
    correctionscorrections Posts: 1,235member
    PCs: "more than half of the industry profits despite 10 percent share"
    Phones: 3/4 of industry profits despite 20 percent share
    Tablets: virtually all industry profits despite 60 percent share

    The law of diminishing returns! Apple is doomed!!

    Must follow Samsung, HP and seek higher share, lower profits, or will be forced to follow the history of Blackberry and Nokia in falling from success at the hands of the next Apple!!!

    Sell, folks. Apple is success-toast. There's no way for it to outperform every industry it participates in greater than it already has, because no company like Apple has ever existed before, and therefore can't. New things simply don't happen.

    Expect Windows 9 to rapidly turn things around in 2015. And before that, two more releases of Android, including Lemon Lime Soda Flavored Sorbet, with PowerWidgets that flash glittering rainbows with infrared advertising.
  • Reply 5 of 66
    MacProMacPro Posts: 17,905member
    Along with reaping a big portion of the profits of both traditional PCs and tablets. Yet somehow, still d00med.

    I am starting to think these Wall Street types sit in front of a myriad of Dell Screens connected to Dells running analytical stock data checking their BBs now and then and assume they are typical users.
  • Reply 6 of 66
    jd_in_sbjd_in_sb Posts: 1,483member
    Love the Jobs quote at the end.
  • Reply 7 of 66
    apple ][apple ][ Posts: 8,360member


    This is all thanks to Apple!


     


    We are all living in an increasingly post PC world, and I remember all of the clueless fools who mocked that term and denied that it would ever come to pass. These morons should all be forced to walk around with huge dunce caps, permanently plastered onto their thick heads.


     


    The average person does not use or need a full PC anymore. Steve Jobs was right on the money when he spoke about trucks and cars. The vast majority of people only need a car, and there are still trucks available for those few people who might need them.

  • Reply 8 of 66
    We are in a pre-PC world. The tablet will increase in capability while maintaining its form factor, with add-ons. The iPadPC will have to use Intel chips and run current OS X software, including OS X. The current iOS software is very limited on the iPad and iPhone; it cannot stay that way.

    I see the iPad and MacBook Air merging. It must.
  • Reply 9 of 66
    What's "uncomfortable" is the walled garden approaches that kills off abilities that power users want and expect from a computing device. The need to hack a system to jailbreak to get functionality you would normally find on a full-fledged computer is not sitting right with me or many others.

    Give me full access to the system on iOS, just like on OS X -- make it an option! iOS devices COULD be SO much more than they are today if Apple opened them up!
  • Reply 10 of 66
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by Apple ][ View Post


    The average person does not use or need a full PC anymore. Steve Jobs was right on the money when he spoke about trucks and cars. The vast majority of people only need a car, and there are still trucks available for those few people who might need them.



     


    Is this really a post PC world? I think that was just marketing speak. Last time I looked Apple still sells several large screen desktop machines. I look at iPad as a compromise device. Sure, I use mine from time to time but I wouldn't characterize it as a entirely perfect experience.


     


    For people who are always on the go or live in tiny little rooms, an iPad is a capable device for many usage scenarios, however, personally, I like my spacious home, full size SUV and my large screen desktop computer.

  • Reply 11 of 66
    apple ][apple ][ Posts: 8,360member

    Quote:

    Originally Posted by mstone View Post


     


    Is this really a post PC world? I think that was just marketing speak. Last time I looked Apple still sells several large screen desktop machines. I look at iPad as a compromise device. Sure, I use mine from time to time but I wouldn't characterize it as a entirely perfect experience.


     


    For people who are always on the go or live in tiny little rooms, an iPad is a capable device for many usage scenarios, however, personally, I like my spacious home, full size SUV and my large screen desktop computer.



    That's just you though. You have to think about the average person IMO.


     


    You or I might need or depend on powerful desktop machines, and I certainly won't be giving up my desktop machines and laptops anytime soon, but I'm talking about everybody else.


     


    I don't think that it was just marketing speak, even Mac sales are supposedly on the decline, just not as much as PC sales.

  • Reply 12 of 66
    apple ][apple ][ Posts: 8,360member

    Quote:

    Originally Posted by waldobushman View Post



    We are in a pre-PC world. The tablet will increase in capability while maintaining its form factor, with add-ons. The iPadPC will have to use Intel chips and run current OS X software, including OS X. The current iOS software is very limited on the iPad and iPhone; it cannot stay that way.



    I see the iPad and MacBook Air merging. It must.


    Well, there had better not be any fans in any iPads ever. That would be a fatal mistake. Also, iOS is still in it's infancy and it's only going to get more features as time goes on.


     


    I already have OS X on my iPad available via Splashtop. I use it for doing stuff that is currently impossible to do on an iPad for me, like playing real money Poker. However, OS X was never designed for touch screens, and I'd rather not have a full OS X, permanently on my iPad. I happen to like the simplicity of the iPad and iOS. When I need to do some heavy duty stuff, I simply switch from my iPad to something else.

  • Reply 13 of 66
    bigmac2bigmac2 Posts: 637member

    Quote:

    Originally Posted by waldobushman View Post



    We are in a pre-PC world. The tablet will increase in capability while maintaining its form factor, with add-ons. The iPadPC will have to use Intel chips and run current OS X software, including OS X. The current iOS software is very limited on the iPad and iPhone; it cannot stay that way.



    I see the iPad and MacBook Air merging. It must.


    It's a common wrong assumption to believe apps made for desktop oriented environment can be useful on mobile oriented device.  Microsoft's past 15 year of tablets attempt should be enough for anyone sane to realize the PC got legacy issues with their CTRL-ALT-DEL and right click. iOS and Android softwares are limited only by the device form factor who need special attention for touch input and limited screen estate, any dedicated iOS apps is better than trying to use a desktop apps mean to be driven by keyboard and mouse with a +21 inch display on a 10inch tablet


     


    For me the Post-PC revolution is more about a software than hardware. Like any other previous system, the desktop PC will died in his current state, people will eventually forget about PC apps, just like PDP-11, CPM, DOS, GEM, and AppleDOS before. 

  • Reply 14 of 66
    solipsismxsolipsismx Posts: 19,566member
    What's "uncomfortable" is the walled garden approaches that kills off abilities that power users want and expect from a computing device. The need to hack a system to jailbreak to get functionality you would normally find on a full-fledged computer is not sitting right with me or many others.

    Give me full access to the system on iOS, just like on OS X -- make it an option! iOS devices COULD be SO much more than they are today if Apple opened them up!

    Maybe then the iOS platform would be a success instead of the low-volume, loss-leader it is today¡
  • Reply 15 of 66
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by Apple ][ View Post




    ...but I'm talking about everybody else.



    Yeah but the masses are asses. Compromise seems to be the conventional wisdom de jure. 

  • Reply 16 of 66
    paxmanpaxman Posts: 4,589member

    Quote:

    Originally Posted by Tallest Skil View Post


    Of course, Apple will suffer for this, despite being the one to cause it all via the product that is singlehandedly killing Middle Modern computing.



    I am not sure Apple will suffer but Apple - or more specifically the iPad will go down in history as the device that brought down the first big wave of personal computing. The interesting thing is to see what will follow. With the collapse of the giants new opportunities will arise that will perhaps be filled by new startups that will create niche products (specially in the area of power-computing such as video, graphics, photography. I fancy much more powerful, much more modularised devices)

  • Reply 17 of 66
    tallest skiltallest skil Posts: 43,399member


    Originally Posted by paxman View Post

    I am not sure Apple will suffer but Apple - or more specifically the iPad will go down in history as the device that brought down the first big wave of personal computing.


     


    How many companies can say they both created and destroyed an entire industry?

  • Reply 18 of 66
    MacProMacPro Posts: 17,905member
    paxman wrote: »
    I am not sure Apple will suffer but Apple - or more specifically the iPad will go down in history as the device that brought down the first big wave of personal computing. The interesting thing is to see what will follow. With the collapse of the giants new opportunities will arise that will perhaps be filled by new startups that will create niche products (specially in the area of power-computing such as video, graphics, photography. I fancy much more powerful, much more modularised devices)

    You are correct although I think to all but the Apple haters and people living in caves, it isn't 'will go down in history ... ' rather 'already has gone down in history ...'
  • Reply 19 of 66
    mikeb85mikeb85 Posts: 506member


    Lenovo grew 13%.  


     


    Only bright spot.  Manufacturers need to smarten up, and abandon Windows.  Microsoft has screwed all their partners, and their OS is terrible.  Linux is more than mature enough to replace Windows, and with some love from OEMs could be easy and stable enough for the average user.  


     


    As long as PC makers stay on the Microsoft bandwagon, they'll suffer...

  • Reply 20 of 66
    MacProMacPro Posts: 17,905member
    How many companies can say they both created and destroyed an entire industry?

    And not just once either ... iPods are all but on the way out too and Apple with the iPod pretty much took the whole 'all your digital music in a device with you at all time' to the zenith albeit they didn't invent MP3 players as such.
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