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How the Shift in PC Buying Trends Impacted Vendors

The key technology trend that has created huge challenges for major vendors -- such as HP and Dell -- shows no sign of changing direction. Worldwide personal computer (PC) shipments are now expected to fall by -7.8% in 2013, according to the latest market study by International Data Corporation (IDC).

The new forecast reflects a shift in PC buying trends as users increasingly consider alternatives such as delaying a PC purchase or using tablets and smartphones for more of their computing needs.

In place of a limited decline of -1.3% in 2013 followed by a gradual increase in volume, the new outlook calls for a more substantial decline of -7.8% in 2013 and -1.2% in 2014 with shipment volume reaching only 333 million in 2017.

To put this into perspective with the past experience, that forecast is still below the 349 million shipped in 2012 and a peak of more than 363 million shipped in 2011.

The updated forecast reflects the significant drop in volume during the first quarter of 2013 as well as the transitions happening in PC design -- as vendors bring products to market that are optimized for Windows 8, including more thin, convertible, touch, and slate models.


"As the market develops, usage patterns and devices are evolving," said Loren Loverde, Program Vice President at IDC. Still, the question remains -- how could Dell and HP not see the full implications of this market transition.

Were they blinded by their alliance with Intel and Microsoft? Did the historical PC legacy impair their judgement when they chose to believe the Ultrabook market projections -- despite the mounting evidence to the contrary?

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 a variety 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.

IDC expects to see some replacements happen in 2014, particularly in the commercial segment as support for Windows XP expires. However, the commercial market has been conservative with replacements, focusing on individual systems more than large upgrade projects.

In addition, workers at many companies already have portable PCs with adequate configurations. The motivation to buy a new system due to falling prices or to switch from a desktop to a portable PC is contributing less to market growth than it did in the past.

In addition, the BYOD (Bring Your Own Device) phenomenon has moved from smartphones to tablets and PCs -- with nearly 25 percent of employees in organizations larger than 10 people claiming to have purchased the primary PC they use for work.

This means that some of the corporate PC purchases that IDC expected this year will no longer happen. The ultimate impact on the Dell and HP financial outlook is therefore likely to be significant.

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