PC makers pin hopes on Windows 10, Skylake to revive slow sales

After three years of falling PC sales computer makers hope Microsoft and Intel can revive a flagging industry. 

PC sales hit saturation point two or three years ago. Analysts knew demand would fall, but the drop was worse than expected.

Some thought replacement sales would keep the market ticking over.

It didn’t happen. Business users and consumers moved slower than usual to replace their old laptops and desktops.

PC market not pretty

The numbers are ugly. Gartner said global PC sales dropped 9.6 percent in the second quarter of 2015. IDC Research had the number close to 12 percent. Year-on-year sales are down at least six percent. It’s been that way since 2013.

Conventional industry wisdom says this is because computer makers got better at their job. After years of churning out unreliable hardware they fixed manufacturing processes and supply chains to the point where today’s computers are less likely to fall apart.

This means the last batch of ageing computers lives longer than previous batches.

Not the whole story

There’s something in that idea, but it isn’t the whole story. Most personal computers, even in the bad old days, lived longer than the normal replacement cycle.

The difference then was that new technologies would come along making a before-end-of-life upgrade desirable, if not compelling.

New applications, better ways of storing data, nicer screens, exciting games, higher productivity, greater mobility and so on were all reasons to splash out on new kit before the old hardware had popped its clogs.

Stability

The constant need to upgrade has changed since the internet moved centre stage and since mobile phones became an essential part of life. New PCs don’t surf the web faster, load Facebook pages quicker or post more photos to Instagram than old ones.

At the same time consumers have not been impressed by recent advances. They responded sullenly to Microsoft’s mistaken push towards touch screens and expressed outright contempt for Windows 8. Few felt the need to upgrade.

Nothing underlines this more than the surge in Apple Mac sales over the same period. Some Widows PC customers were so unimpressed they jumped ship. [1]

Business buyers less impressed

If anything, the response from business to Windows 8 was more negative. Many companies resented being forced off what they saw as the perfectly decent Windows XP.

The lack of enthusiasm for Windows 8 may have only affected things at the margins, but it came on top of already falling PC sales and turned a retreat into a rout.

Now PC makers, Microsoft and Intel plan to get the message out that it is time to upgrade. Expect expensive sales campaigns as they push these messages.

New sales pitch

The sales pitch is “Look at our sleek, slim yet astonishingly powerful Ultrabooks. See what you’re missing by keeping those overweight old clunkers. Try our new all-in-ones or our tablet-to-PC convertibles.”

This strategy will work with business customers, if only because the magic words “productivity gains” carry a lot of weight in management circles.

Consumers are going to take more convincing. Dollars spent on new PCs are dollars that can’t be spent replacing ageing smartphones – which have a far shorter shelf life than laptops.

You’ll notice, added mobility aside, those sales pitches don’t include any compelling consumer reasons to replace old kit.

There’s nothing important new computers can do that old ones can’t. That’s the gaping hole at the moment. For now, consumers will wait until their hardware falls apart before upgrading.


  1. Mentioning Apple sometimes upsets people, but whatever your feelings the company is doing something right in the PC market.  ↩

5 thoughts on “PC makers pin hopes on Windows 10, Skylake to revive slow sales

  1. Back in the 1990s and early 2000s I pretty much replaced my PC every 6 months or so (It’s hard to say as it was more a constant state of upgrade – new HDD, new graphics, more RAM etc, etc). Then around 2006/7 I did a full replacement. Went from WinXP running on a 32 bit machine with 512MB RAM to Linux running on a 64 bit machine and 2GB. That machine lasted me until Xmas 2013 and in that time I’d only replaced the graphics card which I kept in the new system and only replaced late last year.

    What I realised was that the software push for ever more computing power was no longer there. Even new games are no longer requiring the latest bleeding edge tech to run at minimum specs.

    Essentially, the new PCs have power to burn and nobody’s got the software to burn it and so a new PC will last years rather than the months that they used to – even for the dedicated gamer.

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    • For most small business users, those running packaged software and not doing anything fancy with, say, Excel, the cut-off point was in the early 2000s: the computers were powerful enough to run all the main apps. You could trade up to more storage, nicer screens, greater mobility, but in terms of raw functionality a 10 year old processor will handle everything.

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  2. I’m waiting for the upcoming Macbook Pro 17″ with Skylake Xeon cpu mainly for scientific research, programming and some games testing.
    I would not recommend a PC for gaming as they usually need a restart in the middle of a session, which is frankly a pain I’d rather not deal with.

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  3. From my home user perspective only gaming has prompted me to upgrade. Back in the 486/Pentium days my machines were always behind the software curve within 6 months or so. Part of the problem being the machine that cost $2k in the mid-90s was a budget model that was trailing edge and anything resembling a gamers’ machine was prohibitively expensive for general timewasting (and you had to pay for your music back then!). Looking back on my last two machines the upfront costs for a highish-end machine have been far less (you start well ahead of the curve) and the acceleration of software specs has slowed down as they have aligned with consoles that don’t upgrade their hardware all that often So if my 2011 i7 can run the PC versions of today’s XBOX One games I’m not looking at need to upgrade for quite a while 4 years after purchase.

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