Thanks In Large Part to Windows8, PC Shipments Post Seepest Decline In History, Worse Than All Estimates

By Bob Gourley

All technology trackers have known the PC era is over. Of course old fashioned PCs will not disappear, but they are not the driving force they used to be. All projections have been for poor PC sales.

But there was hope that with a great new operating system from Microsoft (Widows8) maybe the decline would not be so bad.

All hopes of that have been shattered. Windows8 wasn’t that great. And other massive megatrends are also at play here, like a slow global economy, a trend towards cloud computing and cloud based software eating the world, and a trend towards powerful smartphones and tablets.

Here is what is up: According to an IDC press release of 10 April 2013, PC shipments have just posted the sharpest decline ever. The worse ever. Worse than the already bad projections.

Here is more from the announcement:

• Worldwide PC shipments totaled 76.3 million units in the first quarter of 2013 (1Q13), down -13.9% compared to the same quarter in 2012 and worse than the forecast decline of -7.7%, according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker. The extent of the year-on-year contraction marked the worst quarter since IDC began tracking the PC market quarterly in 1994. The results also marked the fourth consecutive quarter of year-on-year shipment declines.
• Despite some mild improvement in the economic environment and some new PC models offering Windows 8, PC shipments were down significantly across all regions compared to a year ago.
• Fading Mini Notebook shipments have taken a big chunk out of the low-end market while tablets and smartphones continue to divert consumer spending.
• PC industry efforts to offer touch capabilities and ultraslim systems have been hampered by traditional barriers of price and component supply, as well as a weak reception for Windows 8.
• The PC industry is struggling to identify innovations that differentiate PCs from other products and inspire consumers to buy, and instead is meeting significant resistance to changes perceived as cumbersome or costly.

“Although the reduction in shipments was not a surprise, the magnitude of the contraction is both surprising and worrisome,” said David Daoud, IDC Research Director, Personal Computing. “The industry is going through a critical crossroads, and strategic choices will have to be made as to how to compete with the proliferation of alternative devices and remain relevant to the consumer. Vendors will have to revisit their organizational structures and go to market strategies, as well as their supply chain, distribution, and product portfolios in the face of shrinking demand and looming consolidation.”

What does this mean for us? I’m not sure. I don’t really care, do you? I’ll be fine, and I bet you will be too. Balmer may soon be out of a job, but he probably doesn’t care that much either. He will do just fine in retirement.

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