Are PCs On Their Way Out?

This year has been an eye-opener for the major PC makers and the obvious signs have become clearer each passing quarter wherein the sales figures of PCs (see table) have taken a downward turn with no change in fortunes expected. The tablet market has boomed which has led to a change in market dynamics and consumer demographics.

Sneak peek into the market

Personal computing as a phenomenon has not taken a back seat. The form, however, is required to evolve along with evolving user trends and consumer demands according to industry experts who believe the time for re-invention is here. But what about the traditional form factors? Do they have a place in a market where innovation gets more precedence?

Statistically speaking, in India the actual PC penetration is a mere 8 to 10% which means the untapped 90% still remains a viable consumer base for traditional PC makers to target. "New devices like smartphones and tablets are becoming more accessible but when it comes to the first computing device, desktops or laptops are always the preference, hence, PCs will definitely exist in the long run says Amit Chatrath, product manager, Lenovo India.

Ultrabooks, hybrid notebooks with the dual functionality of tablet-cum-notebook were the talk of 2013 and from this year onwards one can expect the entire market to become hybrid/portable in nature with all the cloud technology, internet of things and high-speed connectivity kicking in.

There is still hope for PCs

There are mixed sentiments coming in from the industry and no one is ready to give up on offering PCs in the country. The purpose for technology is to make the user's life more convenient, more productive. If this productivity is to be determined by the mobility a device can provide, then technology providers must innovate to suit that need, says Shishir Singh, director, product marketing, Dell India. The de-growth being witnessed in the PC segment is characterized by smaller vendors who are operating more successfully in other categories and have taken a business decision to withdraw from the PC business, Singh adds.

Clarifying for the industry, Singh says the usage of PCs is varied and may increase or wane depending on who the end user is. There is a significant user base which is still comfortable in using PCs for their computing needs. Then there are some in offices who haven't got a notebook as a replacement and so have no option but to stay put with the PC. There is a common belief that market is poised such that, while portability and mobility becomes a popular trend and is widely accepted, there remains a unique and separate space for PCs. Also the fact that unlike the restrictive nature of portability of devices in some aspects the PC is easy-to-customize according to the user's needs, this may differ for a family, a graphics designer or an organization.

PC vendors are targeting specific verticals where there is a demand for desktop PCs which include sectors like education and government among others who offer substantial revenue stream for them. "PCs are more suitable towards content creation while tablets & smartphones are more conducive for content consumption," Chatrath adds.

Where should enterprises go?

With the discontinuation of Windows XP from April 2014 onwards, Microsoft has played a wicked card against numerous enterprises who still work on the XP platform. But in Microsoft's defense, shutting down XP may lead to boom in sales for Windows 8.1 and its supporting hardware. From 2014 onwards, Windows XP will stop receiving updates from Microsoft, which in turn should up the demand for Windows 8 platform-based products, according to Chatrath.

But the bigger question is can organizations opt for the hybrid culture wherein security could be a huge risk? On one hand enterprises are very much open to using hybrid devices and with cloud computing becoming an increasingly common phenomenon, data storage is no longer a hurdle. However, that said some enterprises are always on the lookout for customizing specifications which is only possible with personal computers. The PC market may be suffering due to the growth of mobile devices but gradually one can foresee companies adopting IT strategy that represent desktops complimenting their mobile counterparts.

Alternate strategy

A majority of PC vendors agree that PCs will always find takers but there is no denying that the segment could use some innovation or change in ideology. "All-in-one desktops could be the best possible desktop PC alternative, which is innovative, convenient to use, and still offer the feel of a desktop whilst providing the comfort of using a compact device", Singh explains.

The overall PC desktop market is expected to remain flat for the next few years with tablet PC market raking in most of the moolah. In order to sustain a stable sales trajectory companies need to rethink their product strategy and look at offering them in a differentiated form factor. But when it comes to the enterprise segment, the desktop market is expected to offer steady returns over the next three years, according to Chatrath.

The future

It is not easy for a decade-old technology to wither away easily. As per industry experts, the desktop PC will be overshadowed by bulging tablet PC space but even then with a less than double digit PC penetration, the scope for proving the statisticians wrong is highly likely and chances are that desktops shall remain part of our society for a long time to come.