PC sales slump, Windows 8 blamed

Howard Solomon

12 years ago

A slowing world economy and a shift to tablets has meant organizations and consumers aren’t buying PCs the way they used to, the latest computer sales data from IDC suggests.

The figures, released Wednesday show worldwide PC shipments in the first quarter of this year were down 13.9 per cent compared to the same quarter a year ago. That’s worse than the expected drop of 7.7 per cent.

“The extent of the year-on-year contraction marked the worst quarter since IDC began tracking the PC market quarterly in 1994,” the company said. “The results also marked the fourth consecutive quarter of year-on-year shipment declines.

Normally the industry gets a jump when Microsoft Corp. releases a new version of Windows. But Windows 8, with its new interface that mirrors the tile interface on Win8 tablets and smartphones, is one of the factors blamed on slowing sales.

“At this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market,” said IDC vice-president Bob O’Donnell.

“While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the UI, removal of the familiar Start button, and the costs associated with touch have made PCs a less attractive alternative to dedicated tablets and other competitive devices. Microsoft will have to make some very tough decisions moving forward if it wants to help reinvigorate the PC market.”

The effects are seen in the financial troubles of Dell Corp., Hewlett-Packard Co. HP’s worldwide PC sales fell more than 23 per cent year over year in the quarter, Dell saw shipments drop more than 10 per cent globally and 14 per cent in the U.S. Acer saw sales drop 31 per cent.

According to Gartner, which also released PC sales figures Thursday that showed overall shipments have dropped, sales in what it calls the professional PC market — which accounts for half of shipments — has seen growth.

But Rob Enderle, an industry analyst, says one problem is that organizations are hesitating over how to replace their aging Windows XP systems. Windows 7 is too old to drop in, he says, while Windows 8 is too new. On top of that, PC manufacturers have been slow to bring out touch-screen laptops — which organizations usually buy these days — that can take advantage of Win8.

“That lack of clairity is contributing to the shortfall,” he said. “At the end of the day they’re going to have to migrate in the next nine months. I think they’re just putting it off. Which means this time next year we’re going to see a pretty significant (sales) spike.”

IDC says fading sales of mini notebooks (so-called netbooks, a big category for Acer) have taken a big chunk out of the low-end PC market, while tablets and smartphones continue to divert consumer spending. PC industry efforts to offer touch capabilities and ultraslim systems (dubbed Ultrabooks) have been hampered by price and component supply, says IDC, 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.”

The U.S. market had another dismal quarter in 1Q13, contracting -12.7% year on year, with a drop of -18.3% compared to the fourth quarter of 2012. With total volume falling to 14.2 million, quarterly shipments reached their lowest level since the first quarter of 2006. With this latest figure, the U.S. is now in its tenth consecutive quarter of year-on-year contraction (excluding a brief moment of growth – less than 2% year on year – in 3Q11).

Commentators had a field day pouring over the numbers. Computerworld U.S.’s Jonny Evans – who writes about Apple — said Microsoft has signed its death warrant if reports are true that the company will bring its Office suite to the iPad only in 2014. That late, he wrote, makes the company look out of touch.

Read his column here