Five main reasons why PC sales are falling
The latest fall in PC sales has been attributed to Intel's chip shortage, but there are deeper, structural reasons for the decline
When PC sales unexpectedly registered an increase in the middle of last year, it was widely expected a sustained, if modest, revival would be on the cards.
Instead, sales have turned down again, and quite significantly, too. However, there is more than one reason for the sustained decline.
5. Intel chip shortage
This was widely attributed as the main reason for the latest quarter's PC sales fall, but it is just one among a handful of reasons.
There was a time when Intel's manufacturing prowess meant that it could stay a generation or two ahead of its rivals, whether they were direct competitors like AMD/Global Foundries or indirect rivals such as Samsung and TSMC.
However, Intel's three-year struggle to shift from 14nm to 10nm process architectures has disrupted its planning and production.
For most people's word processing, emailing and web browsing needs, a ten-year-old PC is adequate
On top of that, the rise of cloud computing has stimulated demand for high-end server microprocessors, where the profit margins are fattest. It's no surprise, therefore, that Intel has preferred to prioritise the most profitable end of the market over the low-end mass consumer market.
While Intel claims that it will get on top of its manufacturing issues this year, it will also be facing its most sustained challenge in more than 10 years from AMD, which can now offer competitive products across the board - Athlon at the low-end, Ryzen in the consumer and mid-range, Threadripper for workstations, and Epyc for servers.
The question is, can AMD's manufacturing partner for 7nm Zen 2 cores, TSMC, satisfy demand?
4. Ever-lengthening upgrade cycles
Twenty years ago, the typical corporate would have upgrade cycles on PCs of between three and five years; and consumers might not be much different.
However, for most people's word processing, emailing and web browsing needs, a ten-year-old PC is adequate, notwithstanding an upgrade or two (such as an SSD replacing the hard-disk drive and more memory). The only compelling reason for upgrading today is to be able run demanding applications in the office, and to play the latest PC games at home.
According to Avast, the average PC is six years old - meaning that many people are getting by on much older PCs - with web browsers, Adobe Acrobat and office software the most installed applications. Furthermore, many of those applications are out of date, it adds.
3. Cost
While PC prices have fallen, the price of a reasonably powerful PC - together with speakers, monitor and, perhaps, a shiny new keyboard and mouse - still remains significant compared to what else you could buy: A low-end smart TV, a games console and, possibly, even a decent enough smartphone can be had for the same price as a PC with a reasonably powerful graphics card and monitor.
Gaming laptops aren't cheap - nor are they especially upgradeable
Even gaming laptops typically start at around £600, and that price will buy you, at best, Nvidia GeForce GTX-950 graphics or somewhat basic integrated graphics from Intel or AMD.
2. The rise of smart TVs and connected consoles
Most PC buyers never were interested in the PC, but more on what they could do with it: surf the internet, watch films and videos, and play games. Smart TVs, cheap media streaming devices - like Amazon Prime sticks and Now TV set-top boxes - and consoles have put more of this into the living room in a more accessible form. Why watch Netflix in the ‘home office' when you can watch it on a 65-inch TV in the living room?
1. Smartphones
The smartphone has changed people's attitudes towards computing power and communications.
More and more, people expect computing to be accessible and mobile. The PC and laptop, in contrast, are clunky in comparison and often less intuitive to use. Furthermore, features like voice recognition, which have proved successful as a standalone product or service - in a smart speaker or integrated into a smartphone - have bombed on PC.
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