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PC Sales Slump Over Economic Crisis
nandemoari writes "The damage isn't just limited to the United States. Shipments of PCs in Europe, the Mid-East, and Africa dipped to records posted around the turn of the century. It was even worse in Asia, which according to Gartner, posted its worst growth rate ever — just 1.8 per cent.
Within the industry, desktops took the hardest hit, as was expected. Sales of non-portable computers were down about 16 per cent as consumers opted instead for the rising 'netbook' and similar hybrids. That fact alone is troubling for PC makers, given that $300-$500 netbooks offer a far lower profit margin than more expensive and more powerful laptops and desktops."
wait? so you're saying one must actually eat, and have shelter (clothing's optional), before they will use a computer? --Ray
http://www.beanleafpress.com
* Sales Slump Over Economic Crisis
* = Insert nearly anything here
Only the more expensive 8.9" and 10" models are available
People are probably just buying laptops. You can buy a portable, yet powerful, computer for $400. A lot of people at my workplace are using laptops instead of desktops. It could also just be that people have their computers already and are being content with them. You would expect the numbers to dwindle as people buy less. If I already have a desktop, why do I need another?
Well, let's face it, it's not like it was 10 years ago where every 8 months you could buy a PC that was practically double the speed of your current PC. I mean how long have we been sitting at the same speeds?
My company only buys refurb PCs off lease. $200 for a 2.8GHz P4 with 1GB of RAM. It is the only way I can keep up a 25% turn-over rate and stay under budget.
Bearded Dragon
Age-old alternative.
"posted its worst growth rate ever"
BFD. Contact me when it is in decline. A positive growth rate means that sales are still growing. That's just something that bugs me about economic news reporting. We're not in a !!CRISIS!!!..Oh, Nooo!...We're ALL gonna' DIE!! situation, and if we're headed in that direction, reporting how dire the situation is because the economy grew (but not as much as last quarter) doesn't help anybody...except maybe the newscaster.
So, reading the summary, the worst growth rate was 1.8%. That means, on average, the company that sold 100 PCs last quarter, sold 102 PCs this quarter. Boo-friggin'-hoo.
Aah, change is good. -- Rafiki
Yeah, but it ain't easy. -- Simba
These days, you can get a powerful PC with a decent GPU (if you're a gamer) for less than $1k, and a $400 netbook for when you're on the road. Why have anything in between?
A slashdotter who didn't build his own computer is like a Jedi who didn't build his own lightsaber.
Yep, it works.
I mentioned this before but people scoffed. When VISTA is only running on 15% of computers and Windows 7 claims to be compliant with computers that can run VISTA, this mean that most consumers will need to purchase new systems to run Windows 7. What does this mean for the new Windows 7 launch?
Well if they do it within the next 8-10 months, the economy will most likely not yet be recovered and most consumers and businesses will still be wary of making the large purchases. This means a rough launch for Windows 7. Perhaps in 2 years they will have picked up but they will not get the initial response they wish for because it will still require a large number of consumers/businesses to upgrade from older systems.
This is my sig. There are many like it but this one is mine.
There is more than just the economy which is slowing the growth of PC market. Growth comes from two factors: 1) New buys 2) Upgrades. Recently, the PC speed have been good enough, that those who don't want to upgrade, don't need to. I have a 6 year old desk top with spec 2.6 GHz, 180GB HD 1 GB RAM, DVD-Writer, XP-Home, Firewire, TV Tuner. Is there any compulsion for me to upgrade? Now think back 6 years ago when I bought that machine. My older machine didn't have dvd player (let alone writer), didn't have USB and it was 200 MHz (really slow even for MP3 decoding).
However, as we can see, recently the laptops have become far more powerful than they were 5 years ago, so laptop has both the markets, the first time buyers and upgraders and that is why the growth in that segment is high.
These days, you can get a powerful PC with a decent GPU (if you're a gamer) for less than $1k, and a $400 netbook for when you're on the road. Why have anything in between?
Under $1000 new is asking to kill off quality. $1500-$3500 from a non-gaming laptop vendor (perhaps Lenovo and their Thinkpads?) won't make you wonder where the support went or why the thing was built shoddily.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
I think that my core duo running at standard clock speeds is keeping up with everything I need to do with the computer. I still have headroom to overclock it later if there is something I need to do in the future.
Unless some real pig of an application comes along in the future, I expect that I'll be keeping my current C2D configuration for at least 3 years or more.
Notebooks are getting smaller, and have longer battery life, and tend to break more often and often cost more than they are worth to fix, and WiFi is becoming pretty standard everywhere. Desktops are easy to fix (e.g. no need to buy a new one when I can just swap out the defective part), have been more powerful than the casual user has needed for a while now, and consumer confidence is very shaken with Windows Vista (which most users won't upgrade their 4-5 year old computer to use, or specifically is holding on to the old one to not "have" to upgrade), and linux tends to run very well on older hardware (sometimes even better than the latest and greatest if the driver support from the vendor sucks). I'm sure the economy has something to do with it, but has been slumping for quite a while now. The only one appearing to kick ass is Apple, and that is only because they are taking customers away from Dell/HP by having compelling features, Not Vista, more PC compatible, trendy, and if they have to upgrade anyway, might as well get what they want.
I read an article by Michael Dell (lost the URL) saying that the market is saturated in the US; as in there are no "first time buyers" except maybe for the kid going off to college and a lot are going Apple. Everyone who wants a PC already has one, and the manufacturers have done nothing to convince buyers they need a new box. Instead, they've made the machines suck more though inferior integrated parts, made them more difficult to upgrade, and loaded them with crapware to try to make a profit on a product that is already razor thin.
The second problem is that the "Windows" bundled applications like Windows Movie Maker are crappy compared to the iMovie/iDVD bundles on Macs, and the manufactuer ones like Dell-Movie Maker (or Dell DVD Player) are even worse than the Windows default ones. Users get "box shock" when they attempt to buy Off-the-Shelf software so they are really looking for a box that "does stuff" and is "known" for "doing stuff" not just being faster. On Apple, the bundled apps are either very simple to remove, or are fully-functional "free as in beer" includes; here PC manufactures to often include crippled, hard to remove, ugly, slow applications.
Saavy PC buyers remove all that crap and put a clean Windows install or Linux on there. The base consumer has no idea how to do that, and get a piece of crap for their hard earned money. The OEMs should really work to either make Linux ready for desktop primetime, or invest in OSS projects to produce, very good, very simple, portable to Windows if need be, very user friendly, very attractive, free desktop software rather than put together a crappy version, and get rid of all the crap running in the system tray for a clean, snappy system and stop blaming the economy for no one buying there stuff.
Netbooks are doing exactly this; running very efficent OS installs where if feels like the system was designed like a velvet glove over the hardware. Lowering the price and giving the buyer the features they want "size, power usage, WiFi, price." Not more GHz and more ram simply to feed a more hungry, more restrictive, more lackluster OS.
Forgive my spelling from time to time. I'm often posting during short breaks.
There's more going on here than a simple drop in sales due to the current economic climate. The last desktop PC I bought (just over a year ago) was the last PC I will buy. There was a time when a computer was a thing that filled a room, then it filled a single rack, then a desktop box. We are (over)due for the next paradigm shift which will be to small mobile devices. My next computing device will be a Pandora, coupled with a head mounted display. Finally we will be free of the Wintel stranglehold that has been dominant for the past couple of decades.
Unless I was unable to find a laptop that does what I need to do with a computer I don't see why I would go with a desktop. The price/performance difference is not what it used to be.
I could almost get away with using just my phone and a bigger screen and full size keyboard since most of what I do is ssh,email and web.
3 reasons why most consumer apps are not multi-threaded.
1. Before there wasn't a performance need to be multi-threaded, in many ways it was a performance hit.
2. Developing Multi-threaded apps take more considerations.
3. Languages don't have good methods for multi-threading.
So the Multi-Core CPU's when we start getting cores numbers that legacy apps start taking a theoretical performance hit, or stagnation. Then it makes demmand to create Multi-threaded apps.
With more demand for multi-threaded apps Programming Languages programmers, make their language more suited for making multi-threaded code, as it becomes a common function.
These new languages will help ease some of these considerations or at least make them easier, as well Computer Science Programs will teach Parallel processing more core to the Undergrad class, vs Master Level Classes, or an upper level elective for most universities.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
That doesn't really make much sense. Laptops and notebooks are probably replacing desktops, but why would a desktop user go from a powerful machine with a big screen and keyboard to an underpowered netbook with a tiny screen and keyboard? It would be a whole different experience. The slow sales growth much more likely comes from the economic crash and a move to notebooks/laptops that finally compete with desktops on the price/power front. The article writer seems to be trying to latch onto the current buzz to make the piece more "edgy". If netbooks were the alternative of choice, we should be seeing the biggest bite coming out of notebook/laptop sales, not desktops. And what kind of hybrids are "similar" to netbooks?
Doubling you speed was much more noticeable with lower speed.
I heard Dells aren't selling very well in Ireland at all these days.
Good thing then that Michael Dell is at the helm of his ship again. Because when overall growth slows, market consolidation happens. And Mike is a bit more savvy than Ted Waitt, who came back too late and eventually had to sell Gateway to Acer. Maybe throwing in his ponytail to sweeten the deal.
But I don't think Dell will suffer the same fate.
AST and MicronPc got run. So... who is next....
Acer - Not likely
Alienware - hmmm
Apple - Ok, well that's a cheap shot, but hardly...
Asus - dunno how their books look
CyberPower PC - niche market player for gamers, so maybe...
Dell - I don't think so...
Everex - a bargain basement that ships with an Ubuntu knockoff... not looking good..
Falcon Northwest - In this world economy, anybody want to be in the custom high end gaming rig market? Not me.
Fujitsu - Powerhouse, lots of cash
Gigabyte - Margins on mobos?
HP - Well, Carly didn't sink it, so it still floats. Carly went on to sink the GOP, so yay!
HCL Infosystems - Indian firm, lots of national business
Hitachi - hahahah. no
Jetta INternational - How international can you be based in New Jersey?
Lenovo - probably buy one of these smaller players just for the factories
NEC Corp - hmmm. interesting. they may exit the laptop market.
Panasonic
Samsung
Sharp
Sony
Toshiba
TriGem
unisys
Velocity Micro
Vigor Gaming
WidowPC
---
Be interesting to see who on that list isn't with us in 2010.
While I'm sure the recession has something to do with it, the fact of the matter is, unless you're a hard core gamer, or trying to run Vista, any computer bought in the last few years is "good enough."
Heck, I game quite a bit AND have the money, but why spend it replacing a perfectly good machine (which I got over three years ago)?
PCs now are far more powerful than Joe Sixpack needs to read his email and surf the web, so most people are probably fine with the ones they have. I doubt there are many households left that don't have a computer, so they have to justify replacing a functioning one now.
Just goes to show that customers are only buying new hardware when a newer (slower) version of Windows comes out and their existing hardware is inadequate to run it. Nobody is buying Vista, so nobody needs new hardware. 95% of users only do things that Windows NT 4.0 could do just as easily as Vista...yet Vista won't run on my old Pentium 1...why? Because each new version of Windows is bloated garbage designed to keep you upgrading.
This is a given.
I don't know why anyone would question it.
What happens is people begin to get their computers fixed rather than getting a new computer, which is something they should have done all along. Most computers of yesterday are more than capable running today's software (with the exception maybe of Vista--which should have been a no-go to begin with).
Always fix rather than replace unless the computer is far too old. Any honest technician worth anything will be able to tell you that.
You can lead a man with reason but you can't make him think.
Instead, toss a bunch of blade racks together, virtualize your userbase, simplify your desktop management, address many of your network security issues, keep all your data "safe" in the data center, allow better user experience for remote users... lots and lots of benefits (if you can get it to work).
In my company (a large bank), we are due to refresh 10's of thousands of PCs, yet instead, we may refresh NONE of them, go with virtualization (and the saved costs of keeping older PCs will fund the new infrastructure). With PCs bought in the last 3-4 years, acting as thin-clients, we can keep them until they break, and replace them with some cheap thintops.
If many companies are going down this route, then it would be no surprise, coupled with the economy, that PC sales in the corporate world would be dropping!
Lokatana
Someone made the point that with the layoffs. There's less demand on the present IT infrastructure. The present computers can be repurposed easier. Plus there's a thriving market in used computers vs new. That may explain in part the results one are seeing.
that there is no differentiation. All that is needed is for new designs, not one offs. ANd yes, it is possible to create some interesting designs and new markets.
I prefer the "u" in honour as it seems to be missing these days.
I kept back some money for a post-Christmas PC upgrade spend in the hope that prices would fall with the recession & time of year - although working as a techie in the telecoms industry, I'm loathe to spend any money at the moment.
But aside from that fact, as a gamer I've been trying to find justification for upgrading but really can't think of anything. My current low-end dual core and Nvidia 7600GTX card runs all the Valve games (including Left 4 Dead) faultlessly on my 1280x1024 flatscreen monitor as it stands.
As a mainly FPS player, I enjoyed FarCry, Half-Life 2 plus Episodes enormously but found Doom 3 & F.E.A.R. boring. On-line for me is Left 4 Dead & UT 2004 which also run perfectly well.
I got given STALKER & UT 3 as Christmas presents but haven't installed either yet to try them - however, I can't really think of much else I'd like to try out - maybe FarCry 2 if it's not got the same ludicrous demands as Crysis.
And if that's not enough, I've been plodding through the Star Wars Jedi Academy/Outcast & am now looking at a few interesting mods for them and a few other engines.
Most of my game buying seems to have stopped at what was new in 2004 & I really can't think of any more modern FPS games that would hold any interest for me - especially because I'm more of a sci-fi buff anyway & modern or wartime FPS shooters don't really appeal to me.
Gentoo Linux - another day, another USE flag.
Mother, should I build the firewall?
A new PC is at the top of my list, as soon as I scrape up the cash.. oh wait.
The cost of that cleanup, of course, will be borne by taxpayers, not industry.
I know a LOT of people deciding not to buy new computers because they only have Vista. Most people come and ask me if I can put XP on it after they buy it. And frankly, doing that is getting increasingly more difficult because OEMs are changing their part numbers and PCI IDs so their XP drivers don't want to install on the same devices. If I were better at hacking the installers, I would just run a PCI scan and add those numbers to whatever files are needed, but getting them to install without modification is becoming increasingly difficult.
*knock, knock* Hello, capitalists of the world, can you hear us? This is your wake-up call; you get at least one of these every century, in the form, of deep recessions or depressions.
Even once a century never seems to be enough to make the lesson stick, does it? What makes you think we should be okay with knowing that you are padding your fatter wallets at our expense? What makes you think that we can actually afford it? What you're seeing now is economic proof of your miscalculation of how much injury you can cause us without dealing a mortal blow.
Perhaps - just perhaps, mind you - if you and so many others like you hadn't been sticking it to us for so long, we might now still have some of the resources (money) that you disproportionately took from us, and be able to keep spending modest amounts of it on computers and such. Instead, we now have to react disproportionately ourselves - stop buying luxuries - to recover from the injury done to us. We tried REALLY hard to ignore what was happening and keep spending like there was no tomorrow, but you just had to keep trying to raise margins, didn't you? The shit had to hit the fan eventually.
Recessions and depressions are an excessive backlash to excessive greed.
Comment removed based on user account deletion
Comment removed based on user account deletion
Sensationalism is moving like hot-cakes!
_______________________________________
http://techdojo.org/
Unless it's being used as a media pc
Media playback is I/O bound: you can't play 44 or 48 kHz audio faster than 44 or 48 kHz, and you can't play 24 fps video faster than 24 fps, without causing usually unwanted distortion. As for video editing, I can see how that would scale up, giving each core a separate job (decoding, compositing, encoding) or a separate minute of the video to process. But unless you're producing in high definition, you might not need a faster CPU; even an eight-year-old Pentium III can handle the sort of 240p LDTV that one finds on YouTube.
game pc
Gaming PCs are video card bound, unless you're trying to pull a Larrabee and integrate the CPU into the GPU.
file storage
Also tends to be I/O bound.
In unrelated news, Ubuntu popularity has skyrocketed during 2008.
Also, this just in, a Minnesota man claims to have found a way for computers from 2007 to keep up with computers from 2008. Microsoft has commented, "This claim is outrageous! Clearly this man is a lunatic, he keeps calling Windows 'Ubuntu'!
"Most people, I think, don't even know what a rootkit is, so why should they care about it?"
I just came here to get away from the giant Apple fanboi orgy happening on some other thread.
And what we have here? Another apple fanboi.
There is a small minority of us here who may want to discuss something other than Apple. A humble request to all the Apple fanbois - Please leave us alone...
This year MS did pretty much nothing and there was very little motivation to buy anything new. Apple had not announced anything amazing for at least a year now.
Therefore sales drop off. Wow: who'd have thought that?
Engineering is the art of compromise.
Most of us have PCs already, and with reliability getting tolerable, thank goodness, most PC sales are upgrades, no? It is a luxury purchase; a good investment of some extra money. No extra money or a frugal conscience will lead to postponement of such purchases - especially for corporations.
I still disagree with the interpretation that sales are falling. Sales are not growing isn't sales decline... Maybe less than expected, but still, it is not a decline. 1.8% growth is not a decline. My height not growing doesn't mean I am shrinking.
I'll have to agree. Joe Sixpack doesn't need the latest quad core i7's. He can do just fine with his Pentium 4, checking his email, updating his MySpace, and watching YouTube videos. The only people who really need that type of hardware are gamers or graphics professionals.
In December 2007, I ran a Windows 95 system (with a 100-something MHz Pentium & 32 MB of RAM) and I installed my typical software: mIRC & Opera. They ran just fine of that machine.
your children smidgens?
Maybe people just don't want a 100lb system when they can get something that fits in their pocket. I just got an iPod Touch to use as a pocket computer (it works nicely and I'll really like it when I figure out how to write programs for it), and now my wife wants one too. She'll probably get one of those cute Acer netbooks for $400 too as they look handy to throw in the diaper bag for times you need to run a Windows program on the go.
The vast majority of the time we just want web and email access or to make some notes and keep track of our check book, shopping list, etc. For those even a laptop is to much. The iPod is really optimal. To bad they made it such a pain to write apps for - I have to upgrade my OS and pay $100 to become a developer and use Apple's own pet language it seems (or jailbreak it which is also a pain).
The iPhone would be good but $80+ a month seems a lot and we don't like AT&T. If they could give it some competition then I'd be really interested. They need a 32GB model of the iPhone too though. 16GB just isn't enough.
At what price learning? At what cost wisdom? The price is a man's peace of mind, and the cost is his life.
A 3.0GHz P4 w/512MB RAM and 40GB SATA. Intel 945 video. Performance is OK. Sleeps well. Wakes well. There are some video artifacts. Explorer is a little crashy, but it's a beta and I was surprised it ran at all with so little RAM. We shall see.
Help stamp out iliturcy.
Joe Sixpack doesn't need the latest quad core i7's.
Of course not. But the i7... quad core and hyperthreading. 4.2GHz on air. Huge amounts of memory. Built in virtualization. Shiny shiny new box.
er, what were you saying? Hey! Gotta go. I just remembered something I gotta get on Newegg. Keep in touch.
Help stamp out iliturcy.
Just wait 'til you see what happens to Apple's market share now that "thinnest and lightest ceo in the industry" is away from the helm.
Will the board behave?
Will Steve Balmer apply for the job?
Will a new shiny thing emerge to take our minds off his absence?
These and other questions answered NEXT TIME on Rotten to the Core!
A computer once beat me at chess, but it was no match for me at kick boxing. Emo Philips
People are probably just buying laptops...
Possibly. But my desktop is 5 yo and Mrs Smidge's desktop is going on 10...! The reason? We don't game, just appliance the heck out of it. No need to upgrade. Same thing with our vehicles, we just fix 'em and take xtra care with preventive maintenance.
=Smidge=
Very sensible, and the economic crisis is pushing more and more people to be like you.
Tech-wise, this crisis is going to put the most pressure on those companies whose fortunes are tied to computer sales, as opposed to use. Microsoft and Intel are the best examples of the former - almost every computer sold includes a Microsoft OS (+Office) and an Intel processor (+supporting chips). Fewer sales means that, for the first time in the history of both companies (except perhaps their very early years) they may experience significant declines in revenue and possibly even losses (the latter might be avoidable through layoffs - which we have been hearing are in the works).
Google is the best example of the latter type of company, whose fortune is tied to use. Simply put, that people use an old machine as opposed to a shiny new one doesn't matter to Google, as long as that machine can show ads on google.com. Looking at it another way, even a steep decline in computer sales doesn't mean fewer eyeballs on ads - just that those eyeballs are using older machines to see those ads. It's not like people are going to stop using the web. Now, clearly the economic crisis won't be all roses for Google - ad budgets are down, which will hurt. But overall, I'd say the model of tying yourself to computer sales - which worked well through forced upgrades - is finally (and deservedly!) under serious pressure, and Google and Google-like companies will benefit in comparison.
"posted its worst growth rate ever"
BFD. Contact me when it is in decline. A positive growth rate means that sales are still growing
You're confusing the first and second derivatives of PC sales. If the absolute 'growth rate' was, let's say for example's sake, 5% in 2007, 3% in 2008, and will be 1% in 2009, that is a "negative growth rate" i.e. -2% per year ... in other words 'growth rate of the growth rate' is negative, and this IS meaningful (in fact, MORE meaningful than the absolute growth rate percentage) because even though you still have a positive 'growth rate' of 1% in 2009 (looking at a static snapshot, so to speak), unless something changes you can predict that it will likely be -1% by 2010, -3% by 2011, and so on. In other words, that number, though still positive now, is dropping so fast that at the current rate it soon will be negative.
A car analogy might be, if you are driving on the highway and suddenly need to hit the brakes. While you are slowing down, your acceleration is *negative* (second derivative), and even though you are still *moving forward* at a positive rate (in absolute terms - first derivative), you WILL come to a stop at those rates of change.
If Netbook sales are actually rising roughly in correspondence though, then this isn't really a decline, it just means people are buying Netbooks *instead* of full-blown PCs when the former are suitable to their desired tasks - fungible commodity. This is *good* for the economy, especially if (as they suggest) margins are lower on Netbooks, as it means people are just seeking (and getting) better value, i.e. they are still basically getting the computing power they need, for less money ... economies are adjusting to be more efficient and leaner.
"Good" as in good that their business model requires their installed base to grow primarily through new computer sales, which won't be happening, so "good" as in "good for FOSS".