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."

Comments

Newsflash

[daveschroeder]

* Sales Slump Over Economic Crisis

* = Insert nearly anything here

Re:Newsflash

[Hogwash McFly]

"No".

Re:Newsflash

[dvh.tosomja]

>> * Sales Slump Over Economic Crisis
> * = Insert nearly anything here

Except Campbel

Re:Newsflash

[fishbowl]

Invest in things that people need when they are buying houses at low prices. When you buy a foreclosed home, you want lots of home repair and remodel stuff. And there has never been a bigger foreclosure market.

Re:Newsflash

[alexander_686]

"Yes"

If you look at the past 20 years, economic slow downs have not slowed down technology purchases. Computers were perceived as improving productivity. Fire people, hire computers, become more efficient in a downturn was the mantra.

Only now that everybody has a computer is the world of technology synching up with the rest of the economy. It is important news.

Re:Newsflash

[hairyfeet]

I don't think it is just that. I think that for a lot of folks, at least from talking to my customers, that computers have finally passed the "good enough" stage. Everyone seems to forget that during the '80s through 2005 or so the leaps and bounds were just staggering. In a 5 year period I went from a 100MHz to a 350MHz to a 750Mhz to a 1.1GHz to a 1.4GHz. In the early 90's if you had 32Mb of RAM you were spending some money. Now you can pick up, what? 4Gb of RAM for like $40, $80 if you need the older DDR?

I have found with my customers that anything over a 1GHz on a laptop and a 2GHz on a desktop will do everything that want to do. And with the single core machines being so cheap the past few years as the manufacturers made way for the dual cores a lot of folks picked up some pretty nice hardware cheap. And for the average home user a 3.4GHz P4 with 2Gb of RAM is frankly overkill. And that of course doesn't include the SOHO and SMBs, many of whom that I have had contact with are quite happy with their 1.5-2.5GHz desktops.

So I think what we are seeing is not only the economic slowdown, but the realization that computers have simply reached the point that the average person has more power than they need. The average 4 year old computer can watch videos, surf the web, do office work, rip DVDs, etc. And with money tight why bother upgrading something that already does what you want it to do?

Upgrades?

[tritonman]

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?

Re:Regarding the desktops

[SBrach]

No people are buying netbooks. The cheapest netbook on the market is more powerfull than the computer I had only a few years ago. Do most people need more for what they use a computer for.

What's the BFD?

[Shotgun]

"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.

Re:What's the BFD?

[LordNimon]

If the population grew faster than 1.8%, then this is actually a decline. It's no different than if the inflation rate is 3%, but your salary grew just 1% -- you're technically making less money this year, even if your paycheck has a larger number on it.

Re:What's the BFD?

[Yetihehe]

In exponential times sublinear growth means regression.

Re:What's the BFD?

[Kjella]

Indeed. Same thing happens with government budgets; if this year's spending increase is less than the previous year's, it's apparently a "budget cut", even though total expenditures are still greater.

Usually someone is playing tricks with nominal vs real dollars - if the budget is 100M$ and it costs 100k$/patient you can treat 1000 patients. Next year, if the budget is 102M$ and it costs 102k$/patient you can still treat 1000 patients. Normally with inflation getting 100M$ next year when it costs 102k$/patient means you can only treat 981 patients, so while it's not a dollar decrease it's effectively a cut in services. Even a budget increase to 101M$ is an effective decrease in service to 990 patients.

How will this affect Windows 7?

[Foofoobar]

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.

Re:Duh.

[glennpratt]

I don't think that applied to the /. crowd in college. Computer -> tuition -> cheetos -> alcohol -> textbooks was the order for me. I had a much better chance of passing almost all of my classes with a computer, but no textbook, then vice versa.

Hint: The textbook could usually be 'found' online in PDF form, shared, copied in the library, checked out from the library, used in various lab or just ignored wholesale, depends on the class.

Netbooks? Not.

[Perp Atuitie]

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 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?

Re:Regarding the desktops

[MBGMorden]

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?

I think this is a big part of it. I haven't noticed the laptop craze as much myself. Most people I know still use desktops (heck I have a laptop but don't use it unless I absolutely have to).

The lifespan of a computer has changed though. Back in the early days you basically got 2 years out of a computer and then it needed replacing (heck I remember almost busting out laughing when I was a teenager and a guy had me work on his daughter's school computer. He mentioned that "I don't know why it's acting up. I just had a guy completely redo it not more than 2 years ago!").

Today though, even a really, really old computer still gets onto the internet just fine. My parents are using a 1200Mhz system with 512MB of RAM. My sister uses a 700mhz system with 256MB of RAM. Both still work just fine for what they need. I know of countless other people who just use the computer as a web browser (and even most email is web based now so you can't really mention it as a separate app) and are dealing with computers 5 to 10 years old just fine.

I think we've basically hit that plateau where computers have become like cars. Most people have one. They don't really become completely obsolete for basic tasks anymore. I think new sales will gradually slip to hobbyists, rich people, and replacements for broken systems. With the increasingly harsh economic times it's only hastening the arrival of an event that was going to happen anyways.

Re:Regarding the desktops

[shermo]

WoW? Or more broadly, any social computer game that requires a keyboard to interface with.

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[account_deleted]

Comment removed based on user account deletion

Re:Regarding the desktops

[linhares]

This is basically Linux's only chance. As we move on to 64-bitters, Vista, osX, and Linux will compete on a different landscape. The problem, and opportunity, is that THERE ARE NO 64-bit KILLER apps out there. No OS has a single killer app that needs 64-bit computing. SO I think Eric Raymond is wrong about the hard deadline being in 2008. As long as there is no killer app, all architectures are fair play.

Obviously, if the killer app is open source and is born in Linuxland, it will be ported...

Re:Regarding the desktops

[mjwx]

No need to upgrade. Same thing with our vehicles, we just fix 'em
why sir, oh why do you hate America?

I'm not American, Why do you hate Western Samoa.