PC market on the move
09 March 2009
Latest figures suggest that 2008 was a good year for the computer industry, despite the perception that the credit crisis bit hardest at the end of the year when consumer sales are traditionally strongest.
The trend admittedly is not so good going into 2009, but a recent report from iSuppli suggests that the sector will still experience marginal growth (of 0.7%) over the course of the year. And any sort of growth is a welcome sign although this is an industry sector that is better acquainted with double digit growth figures. And despite a disappointing fourth quarter when sales fell by 1.5% compared to the third quarter (it rose by 10% over the equivalent period in 2007), over the course of the whole year growth was 11.6% and total unit sales fell just short of 300 million.
This is a sector that looks like it should have been a ‘victim in waiting’ of the downturn. Both consumers and businesses usually have enough computing power on standby to cater for current needs and there would be no logical reason why a general replacement policy, either at home or in the office, shouldn’t be stretched by six months or a year. So why have sales held up? My first instinct would be that computers are now so inexpensive. A basic desktop can sometimes cost little more than the software apps that run on it, while laptops cost what a fully specified desktop would have cost two years ago. There is no doubt that the cost factor will have helped, but the real reason, according to iSuppli analyst Matthew Wilkins, is mobility. The rise of the notebook.
The figures bear this out. While desktop sales fell by 4% in 2008, the sales of notebooks rose by 35%, and in the last quarter sales of notebooks overtook those for desktops for the first time. “In the PC market, mobility is king,” Wilkins said. “This is because the prices, features, performance, and convenience of mobile PCs are striking a chord with both consumer and business users. The results in 2008 illustrate what is likely to happen for years to come – declining sales of desktops and rising volume for notebooks.”
‘Mobility’ has turned the notebook into a ‘killer app’ Of course it is not the notebook that is the important thing in mobility – it is the user. The user can only be mobile if the computer in his or her hand if it does everything that a desktop PC would previously have done. In the past desktops could out-perform the laptop in every important criteria, but now a laptop’s performance is such that it imposes no restrictions on what it can be used for. Most significant of these performance improvements is connectivity, the enabling technology behind the rise of the laptop. Mobile computing has become easy and affordable to the point where there is little point of investing in a desktop when it is easier for most engineers to just fold their computer away, pop it in the bag, and effectively keep their office at their fingertips.
It will also be interesting to see in the future if a continued migration to notebooks has any bearing on the overall manufacturing environment. This is such a significant sector of the electronics manufacturing market that changes to it will have an impact of the entire dynamic of the industry - it could be that the decline of the desktop, typically produced through an OEM/EMS partnership, is challenged by the ODM model typical of the notebook market. Much will depend on how the top companies respond to the changing demand.
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