Personal computers (PCs) were once touted by Byte Magazine to be an endless market with no bottom in sight--until now. The PC market began its long decline in 2012 as users switch to smartphones and tablets as their primary connectivity device: R. Colin Johnson
Here is what IHS says about the declining PC market and the effect it will have on Intel: After entering the year with high hopes, the global PC market has seen its prospects dim, with worldwide shipments set to decline in 2012 for the first time in 11 years, according to the IHS iSuppli Compute Platforms Service at information and analytics provider IHS (NYSE: IHS).
The total PC market in 2012 is expected to contract by 1.2 percent to 348.7 million units, down from 352.8 million in 2011, as shown in the figure attached. Not since 2001—more than a decade ago—has the worldwide PC industry suffered such a decline.
“There was great hope through the first half that 2012 would prove to be a rebound year for the PC market,” said Craig Stice, senior principal analyst for computer systems at IHS. “Now three quarters through the year, the usual boost from the back-to-school season appears to be a bust, and both AMD and Intel’s third-quarter outlooks appear to be flat to down. Optimism has vanished and turned to doubt, and the industry is now training its sights on 2013 to deliver the hoped-for rebound. All this is setting the PC market up for its first annual decline since the dot-com bust year of 2001.”
The year started off with major hope for Intel’s ultrabooks at the annual Consumer Electronic Show (CES) in Las Vegas. New and innovative form factors like convertibles, combined with the first appearance of Windows 8 demos on display, provided a fresh wave of enthusiasm for the possibility of a revitalized PC market. Even when first-quarter PC shipments came in, the less-than-stellar results were thought to be a minor setback.
The high expectations continued midyear during the big PC event at Computex in Taiwan, as Intel plugged its latest Ivy Bridge processor. Shipments during the second quarter, however, once again disappointed.
For now, important questions remain for the PC market and the rest of the year:
· How much impact will Windows 8 really have toward boosting the PC market in the fourth quarter?
· Will continuing global economic concerns neutralize whatever hype or interest has been generated by ultrabooks?
· Will mobile computing gadgets such as tablets and smartphones win over PCs during the crucial holiday selling season, taking precious consumer dollars and keeping PC sales at bay?
There are signs that a strong rebound could still occur in 2013. While IHS has reduced its forecast for them, the new ultrabooks and other ultrathin notebook computers remain viable products with the potential to redraw the PC landscape, and the addition of Windows 8 to the mix could prove potent and irresistible to consumers. Whether a newly configured PC space could then stand up to the powerful smartphone and tablet markets, however, remains to be seen.