PC Sales Retreat Shows No Sign of Ending: 10 Reasons Why

By Don Reisinger

No doubt about it: Tablets have been the chief reason for the decline in portable PC sales. People around the globe have opted to pick up a device like the Apple iPad or the Amazon Kindle Fire rather than a notebook. And PC vendors have since been negatively affected by the shift. As long as tablets are on store shelves, PC vendors need to rethink how they view the portable PC market.

The data from IDC shows quite clearly that buyers in mature markets in developed nations are moving away from PCs. According to the research firm, PC sales worldwide in developed countries were down 7.6 percent in 2013 and will decline 3.8 percent in 2014. That trend is expected to continue through 2018, when worldwide sales drop 2 percent in mature markets. It’s clear that countries that have been buying computers for years might never get back to the sales level they once generated.

One of the surprises for IDC in the last year was just how poorly emerging markets performed for PC vendors. Those markets were down 11.3 percent year-over-year in sales and are expected to drop 8 percent in 2014. That should turn around eventually, but according to IDC, emerging markets were supposed to bolster the PC market on the assumption that PC sales haven’t reached a saturation point there. Instead, they’re hurting the space.

Windows 8 has proved exceptionally unpopular among consumers and enterprise customers. In fact, Microsoft is scrambling to get Windows 9 into the market next year, according to reports. As soon as customers around the world got a glimpse of Windows 8, they fled. And PC sales have only gone south.

As IDC pointed out, the PC market’s success or failure is heavily reliant upon the economy. The worldwide economy is still sluggish, with no signs of significantly picking up anytime soon. As long as the economy disappoints, PC sales will follow suit.

Interestingly, IDC expected overall PC sales to be even lower than its projection for 2013. But enterprise customers around the world spent more than expected to replace Windows XP machines. While that operating system will hit end-of-life in April 2014, IDC believes that most customers have already made the upgrades, meaning further XP replacements will do little to boost worldwide PC sales.

Desktops continue to be a vexing segment of the market for PC vendors. Sales were down 7.8 percent in 2013 and will drop 5.6 percent this year. According to IDC, desktop sales worldwide will continue their slide, with no end in sight. It appears that desktops will contribute less and less to the PC market over the next several years.

In an earlier study from research firm Gartner, smartphones were viewed as threats to PCs. It might seem odd, since smartphones are very different from personal computers, but the research firm argues that consumers have a finite amount of cash to spend on new products and many of them are deciding to stick it out another year with their PCs and get new smartphones now. It’s an interesting market factor.

Vendors aren’t necessarily helping matters when it comes to PC adoption. As Gartner points out, many PC vendors have started to focus product development on tablets and other portable devices where there is sales growth, rather than in desktops and laptops, where sales are declining. If PC makers show less interest in PCs, why should it surprise anyone that customers have followed suit?

Years ago, it wasn’t uncommon for companies and consumers to invest in new computers every three or four years. Nowadays, though, computers are lasting longer, due mainly to the slowed incremental growth in component power. Many XP machines are still working reliably even after 10 years of service. Enterprises seeking to save money are reaping the benefits of extended machine life cycles. The longer the PC lifespan, the fewer the sales. It’s that simple.