PC Sales Hitting the Skids This Year, Despite Windows 8

by Reads (2,081)

Two research firms find that sales will at best be flat with last year, and that’s with Windows 8 shipping in two months.

by Andy Patrizio

A confluence of global and industry issues are merging into a proverbial perfect storm that will bring PC and semiconductor sales to a halt this year, according to new research from both IDC and IHS iSuppli.

IDC is predicting the worldwide PC market will grow at just 0.9% in 2012 over 2011 as mid-year shipments slow. The emerging markets that have carried the industry, like China and India, are slowing, while the U.S. remains slow and there is some wait-and-see sentiment as Windows 8 approaches.

“It’s a perfect storm. There is no single driver responsible for the slowdown,” said David Daoud, research director for personal computing at IDC. “We’ve hit saturation in mature economies. Everyone who needs a computer has one or two. These computers tend to benefit from good enough computing. So there is little incentive for consumers to upgrade.”

Windows 8

Then there’s a hold off in buying due to the approach of Windows 8, something that has happened before with OS releases, he noted. Plus the economy is weak, there are new products competing for PC dollars like tablets and smartphones, and slowing economies overseas don?t help.”

The current consumer installed base is likely happy with what it has, especially Windows 7 users, and won’t be in a rush to upgrade. On the business side, Daoud expects the SMB market will go for Windows 8 first, since there’s fewer people involved in the decision-making process.

Also, many enterprises are just beginning a Windows 7 rollout and aren’t about to start from scratch again.”The enterprise market will go slower, which is fine since Microsoft hasn’t designed [Windows 8] for the enterprise market today. But that will all shift two to three years from now,” he said.

Meanwhile, iSuppli sees semiconductor sales as well below their levels in 2011, and it only partly blames events in the computer industry. It also sees the U.S. Presidential election as an issue, plus uncertainty in the Eurozone and possible collapse of the Euro, the threat of war in the Middle East and trouble in Syria, and the very real chance of a hard economic slowdown in China as hanging over the industry.

“The problem is these major events are hanging over consumers and businesses, and as a result, people are going into a mode of cautiousness until they see how things play out. There’s enough fear, uncertainty and doubt out there that people are becoming cautious and it’s having an impact on the economy now,” said Dale Ford, senior director at IHS iSuppli.

In the U.S., there is great concern over our fiscal house because there will be a huge tax increase next year if Congress takes no action and Congress has gone without a budget for more than three years. Right now no one has enough power to make any decisions, so Ford said one side needs to gain enough power to get a grip on things and bring some certainty to the budgetary process.

On the Eurozone, he says the worst case scenario, a dissolution of the Eurozone, is less than a 25 percent likelihood, but still a risk. China is showing troubling signs of a hard landing rather than a soft landing after years of amazing economic growth.

“We’re getting more worrisome reports out of China on their own consumption and run rates at factories in China, that inventory is just piling up,” said Ford. Finally, there is the strife in Syria and the chance of Israel and Iran going to war and potential disruption of oil supplies.

All of this makes a new laptop seem unimportant in the grand scheme of things. “At this point the PC issues are minor. The analysis we’ve done shows there are factors in tech, but the primary dominant driving force is the macroeconomic impact. Anything else — a particular rollout of an OS, a patent judgment in a lawsuit, take your pick — those impacts are there but they take a back seat to the macro economic issue right now,” said Ford.

We’ll get a better feel of how it’s played out in the fourth quarter, when the U.S. elections will take place, new economic data will come from China and the Middle East might even settle down. The, said Ford, we’ll get a better idea if they play out a worst case scenario or a more moderate picture.

LEAVE A COMMENT

0 Comments

|
All content posted on TechnologyGuide is granted to TechnologyGuide with electronic publishing rights in perpetuity, as all content posted on this site becomes a part of the community.