Wow, has the PC industry been KO'd by the mobile revolution that Apple began with their iPhone in 2007? It appears so. Microsoft didn't see it coming and they never thought it would ever come to this point in time so quickly. A new study out by IDC states that the PC industry is tanking faster than anyone could have ever imagined and Wintel just can't grasp how to stop their ship from sinking. They may have one last crack at turning this around later this year with new Ultrabook Convertibles or hybrid notebook-tablets. I think the concept is right, but the nagging doubt about Windows 8 may eventually kill the enthusiasm for this category. Wintel is down for the count with consumers, and with Google's Glass on the way this fall, it doesn't look hopeful.
PC Stats for Q1 2013 are the Worst Since 1994
According to IDC PC Tracker, 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%. 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.
At the moment, most of the decline could be attributed to fading Mini Notebook shipments which took a big chunk out of the low-end market while tablets and smartphones continue to divert consumer spending.
Microsoft`s Radical Windows 8 User Interface Takes a Hit
PC industry efforts to offer touch capabilities and ultra slim 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.
Bob O'Donnell, IDC Program Vice President, Clients and Displays delivered a stinging assessment of the PC sector by laying the blame squarely on Microsoft`s radical changes to Windows 8.
Mr. O`Donnell stated that "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. 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 report also notes that the impact of slow demand has been magnified by the restructuring and reorganizing efforts impacting HP and Dell.
Windows 8 Adoption in Top Universities is a Disaster
Institutional contracts being a sizable portion of Microsoft's PC business as a whole, a quick study by Chitika Insights team that was published yesterday looked to examine how Windows 8 was faring on college campuses. The results show that it's a clear-cut disaster. A graphical summary of the top schools with the highest and lowest rates of Windows 8 adoption, along with the full list, are both presented below:
The so called top university list is constantly changing. From the time the study was taken until now it has dramatically changed. So the list of top schools listed in the study is a snapshot in time.
One Last Chance for Windows 8
In October 2011 we posted a report about the debut of Windows 8 and asked the question: Will Windows 8 be a winner of loser? Microsoft's presentation at that time was very bold and it appeared that they had their vision in place. Their various teams were beaming with confidence.
But the timing to market of this operating system was a disaster as it was completely disorganized and blindly favoring the release of Microsoft's surprise "Surface" tablet. But as a "Windows" computer OS for notebooks and the desktop it quickly became a disaster. The PC industry's ecosystem just wasn't prepared for this shift and most notebooks and desktop displays weren't touch-enabled. Add to that, the media absolutely hammered Microsoft's shift to the Metro Interface for PC's. It was doomed right out of the gate.
The Surface tablet didn't get to most retailers outside the US during the most important season of the year. I didn't see one at Best Buy until the end of January. They truly blew it. Just last month Samsung slammed Windows 8 for the declining PC market. Earlier in the year HP announced a new slate tablet and lo and behold, they gave Google's Android the nod instead of Windows 8.
The last best chance for Windows 8 to make an impact is with their upcoming Ultrabook Convertibles that will essentially provide consumers with a fully functional Notebook with the convenience of a detachable display acting as an independent tablet. I've seen HP's Envy X2 and I really love the idea. The tablet segment is twice as light as an iPad and has better battery life. I think this segment can do well if it's marketed right, if the supply is there, if the prices are in check and Microsoft adds some hot features to get their OS into a competitive position.
Patent Bolt just reported on a new patent from Microsoft illustrating their hope of bringing Xbox gaming to their tablets and Convertibles. The question is when? But no matter how you slice it, they better get their act together before Google runs them over with Glass and Apple delivers their annual killer upgrades this fall.
The next generation Ultrabook Convertibles may be one of the last chances to help turn the traditional PC sector around and get it back to a stable growth trajectory. No one is saying that it will ever return to its glory days because the computer world has fundamentally forever. Tablets and smartphones have taken the spotlight with consumers and in the next few years, the wearable computer revolution will be upon us.
Who knows, perhaps Apple will be able to give the desktop market a badly needed jolt of new life this fall. But for now, the referee is giving Windows 8 the ten-count and who knows if Microsoft has it in them to get back off the mat. Time will tell.
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