Is the PC Party Officially Over?

[CharlieD]

According to Gartner and IDC:

Gartner Says Worldwide PC Shipments Declined 9.6 Percent in First Quarter of 2016

Worldwide PC shipments totaled 64.8 million units in the first quarter of 2016, a 9.6 percent decline from the first quarter of 2015, according to preliminary results by Gartner, Inc. This was the sixth consecutive quarter of PC shipment declines, and the first time since 2007 that shipment volume fell below 65 million units.

"The deterioration of local currencies against the U.S. dollar continued to play a major role in PC shipment declines. Our early results also show there was an inventory buildup from holiday sales in the fourth quarter of 2015," said Mikako Kitagawa, principal analyst at Gartner.
​

Gartner Says Worldwide PC Shipments Declined 9.6 Percent in First Quarter of 216


IDC Says Worldwide PC Shipments Declined 11.5% in First Quarter 2016

Worldwide PC shipments totaled 60.6 million units in the first quarter of 2016 (1Q16), a year-on-year decline of 11.5%, according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker. Shipments were in line with conservative expectations for a decline of 11.3%, and anticipated a relatively weak environment during the first half of 2016 as Windows 10 enterprise upgrades largely remained in pilot phase while consumer demand remains weak. The volatility in stocks, commodities and currencies also helped depress shipments.

"In the short term, the PC market must still grapple with limited consumer interest and competition from other infrastructure upgrades in the commercial market," said Jay Chou, Research Manager, IDC Worldwide PC Tracker, "Nevertheless, IDC still projects total business IT spending to grow compared to 2015, and as we head toward the end of 2016 things should start picking up in terms of Windows 10 pilots turning into actual PC purchases."

PC Shipment Decline Continued in First Quarter as Expected, with Hopes for Improvement Depending on Commercial Replacements & Economic Stability, According to IDC - prUS41176916

 

[hist78]

I think the party was over several years ago.

 

[lefty]

Also tablet sales are down and smartphone sales are down. I'm just wondering what people are using. Abacuses?

 

[U235]

Their old tablets and smartphones?

 

[Bernard Murphy]

Let me know when you see enterprises running their businesses on smartphones and tablets. Legal documents, spreadsheets, presentations, engineering, user guides, that kind of thing. If you have an information age job, you're still using some kind of PC (I'm writing this on my MacBook Pro). Not saying PC usage isn't scaling back, but we're a long way from the end of the PC. Usage may be down generally because the screws are down everywhere on cost control and there's no compelling reason to upgrade until the IT path forward becomes more clear.

 

[nenadicn]

If PC sales continue to decline we'll see hardware price increase soon. We may get back to the era when PC workstations were very expensive piece of equipment. Professionals (engineering, CAD, CAM) will have to use them, while others will just work on their mobile device. We're witnessing "bring your own device" movement already. I really do not see any obstacle to run desktop-class office applications on mobile platforms of today. It's just a mater of plugging your smartphone to monitor, keyboard and mouse in the office.

What do you think how this change will influence the industry? Industrial PC is holding a significant market share there. I believe there's a chance for mobile technology to penetrate industrial space in the future. For some applications mobile already has advantage over PC. Take for example 4K image processing systems. Current mobile SoCs (like Snapdragon 800) are capable to do it in real-time at power well below 5 W.

 

[Daniel Nenni]

From TSMC:

Due to the world macroeconomic uncertainties, we reduced our estimate of 2016 smartphone growth from 8% to 7%, PC from minus 3% to minus 6%, tablet from minus 7% to minus 9%, while maintaining digital consumer electronics growth rate at minus 5%. In spite of the reductions of these growth rates, there are still growth areas in smartphones, broadband network, wireless infrastructures and gaming.

For the whole year of 2016, we estimate the growth of world semiconductor to be about 1%. We maintain our estimate for the foundry market growth of about 5%, and TSMC revenue growth of 5% to 10% this year.

Taiwan Semiconductor Manufacturing's (TSM) CEO Mark Liu on Q1 216 Results - Earnings Call Transcript | Seeking Alpha

 

[Arthur Hanson]

Autos, medical, physical security, drones of all types (air, sea, land, space), robots of all types, and the edge of IOT are all growth areas, plus a few I haven't thought of yet.

 

[ippisl]

Bernard, A lot of enterprise software is available on web-based format, which runs pretty well on a cheap ARM based chromebook, which is a more secure environment.. And let's not forget the popularity of linux among technical people - which can also run well on an arm etc.

And even more than decreasing unit shipments, they've probably eroded cpu/os prices for wintel.

 

[Bernard Murphy]

Ippisl - true that it's certainly possible, less clear to me that it's likely in the immediate future. Outside of engineering organizations, there's huge amounts of material tied up in legacy documents, databases, etc. We have a privileged view of computing inside engineering. The vast majority of computing has different dependencies and expectations. My 2 cents

 

[ippisl]

Sure some people still need windows compatibility, but indirectly the chrombooks have driven the price(at the low end) of windows laptops to $144 and windows computers(i.e. intel compute stick) to $99. I wouldn't be surprised if those work well for many office jobs.

Heck in it's latest goldmont processors Intel is integrating counting savings due to integrating level shifters and other parts that cost tens of cents , to the total BOM cost of $7.5.

 

[count]

Ippisl - true that it's certainly possible, less clear to me that it's likely in the immediate future. Outside of engineering organizations, there's huge amounts of material tied up in legacy documents, databases, etc. We have a privileged view of computing inside engineering. The vast majority of computing has different dependencies and expectations. My 2 cents

I think application/desktop virtualization can take care of most legacy software. HP is working on something that allows you to run Windows applications on an ARM devices through Citrix. Another possibility is packaging an application with an emulator in a Docker instance.

Companies are already using desktop virtualization to avoid the cost of deferring PC upgrades in the enterprise, since you can use a 5 year old PC and not have to worry about performance if applications are virtualized and run somewhere on the cloud.

 

[Bernard Murphy]

In a mood for jokes today, so here's an old one:

An engineer, a physicist and a mathematician are staying in a hotel.
The engineer wakes up and smells smoke. He goes out into the hallway and sees a fire, so he fills a trash can from his room with water and douses the fire. He goes back to bed.
Later, the physicist wakes up and smells smoke. He opens his door and sees a fire in the hallway. He walks down the hall to a fire hose and after calculating the flame velocity, distance, water pressure, trajectory, etc. extinguishes the fire with the minimum amount of water and energy needed.
Later, the mathematician wakes up and smells smoke. He goes to the hall, sees the fire and then the fire hose. He thinks for a moment and then exclaims, "Ah, a solution exists!" and then goes back to bed.

Point being that the existence of a solution is not evidence that it will be successfully (widely) adopted.

 

[hist78]

In a mood for jokes today, so here's an old one:

An engineer, a physicist and a mathematician are staying in a hotel.
The engineer wakes up and smells smoke. He goes out into the hallway and sees a fire, so he fills a trash can from his room with water and douses the fire. He goes back to bed.
Later, the physicist wakes up and smells smoke. He opens his door and sees a fire in the hallway. He walks down the hall to a fire hose and after calculating the flame velocity, distance, water pressure, trajectory, etc. extinguishes the fire with the minimum amount of water and energy needed.
Later, the mathematician wakes up and smells smoke. He goes to the hall, sees the fire and then the fire hose. He thinks for a moment and then exclaims, "Ah, a solution exists!" and then goes back to bed.

Point being that the existence of a solution is not evidence that it will be successfully (widely) adopted.

I'm wondering a semiconductor company executive who didn't take any engineering courses in college but did earn a MBA degree will do?

A staff meeting?

 

[Bernard Murphy]

No - form a task force to brainstorm solutions, then do test marketing to validate proposals, then form a team to develop a roll-out plan. Of course by then the hotel has burned down, but the plan is solid.

 

[benb]

PCs aren't necessities of life. Neither are smartphones nor tablets. While the US economy is OK, the rest of the world is in a recession, which is a time when necessities are emphasized. Everything has a season; this isn't the consumer IT season.

 

[Bernard Murphy]

Recession? According to everything I have read from analysts etc the economy is growing. Slowly certainly, but that isn't a recession. That said, I totally agree that many companies are holding back on new IT investments, as they are holding back on many investments. That's part of why the economy isn't growing faster.

 

[Bernard Murphy]

Recession? According to everything I have read from analysts etc the economy is growing. Slowly certainly, but that isn't a recession. That said, I totally agree that many companies are holding back on new IT investments, as they are holding back on many investments. That's part of why the economy isn't growing faster.

Apologies - you said "the rest of the world". Didn't notice that bit. According the the UK Telegraph, the following countries are in recession: Belgium, Czech Republic, Greece, Italy, Portugal, Taiwan, Slovenia, Ireland, Netherlands. Bloomberg add Venezuela, Russia and Ecuador. And China - who knows - numbers there are probably completely manufactured.

There are a number of countries at risk of dropping into recession but not there yet. So "rest of the world in recession" is still a bit of a stretch.

 

[Brianhayes]

Apologies - you said "the rest of the world". Didn't notice that bit. According the the UK Telegraph, the following countries are in recession: Belgium, Czech Republic, Greece, Italy, Portugal, Taiwan, Slovenia, Ireland, Netherlands. Bloomberg add Venezuela, Russia and Ecuador. And China - who knows - numbers there are probably completely manufactured.

There are a number of countries at risk of dropping into recession but not there yet. So "rest of the world in recession" is still a bit of a stretch.

We are in a recession all right. It started in 2008 and it is still running. The USA apparently came out by printing money (also UK) and every time the Fed hints that it wants to bring things back to normal world markets blow a loud raspberry and the Fed backs down. In the rest of the World China, Japan, South America, Russia and most of Euroland are confronted with deflation and flat economies. They are also printing money where they can and it is doing them little good. History will describe this period as the Long Recession IMO.

Surest sign. Technology is supposed to be the one growth area but semiconductors are flat as a pancake. It is myopic to look at the bubble of money Governments have created to stimulate growth that isn't there and say, "We are not in recession".