Reference no: EM131728880

Is the PC a Product in Decline

As technology changes, so do customer requirements — as well as the products available in themarketplace. Over the years, there have been many popular products, brands and technologies that have lost their market position and left the market altogether — for example, typewriters, vinyl records and video tapes. In the IT industry, there has been discussion that with the growth in tablet sales (like Apple iPads) and smartphones, personal computers such as laptops and desktops will soon become products of the past. Or will they?

In 2013, two industry studies showed falls in the PC market. Research company Gartner reported that global shipments of PCs were down 10.9 per cent, which resulted in ‘one of the worst declines in its recent history’ with falls in five consecutive quarters. Principal analyst at Gartner, Mikako Kitagawa, said:

We are seeing the PC market reduction directly tied to the shrinking installed base of PCs, as inexpensive tablets displace the low-end machines used primarily for consumption inmature and developed markets.

The second report by International Data Corporation (IDC), using a different methodology, came to thesame conclusion, although produced a slightly smaller decline than expected. IDC said the numbers ‘reflect a market that is still struggling with the transition to touch-based systems running Windows 8’.

At the same time as the PC market is declining, the tablet market is growing, with IDC predicting a nearly 60 per cent increase in tablet sales, and for tablets sales to surpass those of portable PCs. According to Ryan Reith at IDC, ‘What started as a sign of tough economic times has quickly shifted to a change in theglobal computing paradigm with mobile being the primary benefactor’.

Does this mean an end to the PC market? IDC believes that PCs will have an important role in this new era of computing, particularly for businesses. However, for many consumers, tablets provide a simple solution for those wanting the basic capabilities of a PC.

Further, Loren Loverde, program vice president at IDC said:

Many users are realizing that everyday computing, such as accessing the Web, connecting to social media, sending emails, as well as using a variety of apps, doesn’t require a lot of computing power or local storage. Instead, they are putting a premium on access from avariety of smaller devices with longer battery life, an instant-on function, and intuitive touch-centric interfaces. These users have not necessarily given up on PCs as a platform for computing when a more robust environment is needed, but this takes a smaller share of computing time, and users are making do with older systems.

It could be argued that the PC market would decline anyway, despite the growth in tablets and smartphone sales, as PC sales have achieved a sort of equilibrium. The processing power of PCs already meets the needs of most users, so any small improvements in newer models are not enough to result inthe purchase of a new PC.

While industry people, researchers and journalists debate the different views, it is always important to observe the views of the users or customers. One way is to review online consumer comments. Following an online story on the decline in sales of PCs in The Age, readers left a range of views on the topic. Most agreed that lightweight tablets are great for web browsing, watching movies and social media. Many commenters stated that they owned both a tablet and a PC or laptop, acknowledging 256that thecapabilities of tablets are still very limited (unable to complete more complex word processing, gaming and photo editing tasks). Most commenters still used PCs or laptops for work purposes where applicable, so it seems unlikely that consumers will ditch the PC altogether any time soon. Some consumers even looked to the future, envisioning a hybrid device using both tablet and PC technology — a device that docks to a larger monitor with a keyboard and mouse, but able to be easily transported to meetings or on business trips.

Journalist and commentator Tony Bradley stated his view:

Ultimately, PCs aren’t dying, they’re evolving. One form of PC is in decline, but another form is growing exponentially. The tablet market is expanding much faster than the traditional PC market is shrinking, and combining the two for a more comprehensive perspective on personal computers in general shows that the PC market is still growing.

Clearly, there is not one view about the decline in PC sales, and only time will tell which is correct.35

Questions

Evaluate PCs and tablets in terms of the total product concept.

What marketing strategies do (or could) PC manufacturers use to progress potential consumers through the stages of the product adoption process and increase sales?

Review the customer opinions about what is happening to the PC and tablet markets, and suggest your own opinion on what is happening, and what will happen in the next few years.