PC sales hit a saturation point three years ago. Analysts always knew demand would fall, but the subsequent 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 old laptops and desktops.
PC market not pretty
The numbers are ugly. Gartner said global PC sales dropped 9.6 per cent in the second quarter of 2015. IDC Research had the fall at close to 12 per cent. Year-on-year sales are down at least six per cent. It’s been that way since 2013.
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.
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 Windows PC customers were so unimpressed they jumped ship.
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.