Is the PC industry “collapsing?”

Not exactly!

1) Yes, PC sales continue to fall. Q2 2016 sales are down 4.5% from the same quarter in 2015.

2) But given that PC sales fell over 10% for all of 2015, and are being forecast to fall 11% this year, a 4.5% drop is actually better than expected!

3) Oddly, Apple PC sales are falling faster than average: they are losing market share. I have no idea why that is, but it is an interesting shift given that Mac share had been rising for 6-7 years now.

4) Going forward, I predict that PC sales will continue to decline: bad years will be down around 10%, average years will see a 5% drop, and good times will be flat. It is possible we might see a year where sales actually increase, but a) I wouldn’t count on it; and b) any increase will be 1-3%, nothing spectacular.

5) PCs are a mature market, with stable and reliable technology, and an ever lengthening replacement cycle. Most people and businesses will buy a new computer only when the old one breaks down; a new machine every 6-7 years.

6) This has NOTHING to do with how computers are being used. Fewer new ones are being purchased, but the most recent US data shows that people in all demographics continue to use their computers for an hour per day (not including work usage) and the usage is actually higher in 2016 than it was last year: internet on a PC rose 10 minutes year over year according to Nielsen.

7) Also worth remembering that even with continuing declines, we will see over 250 million computers a year be sold, worth well over $100 billion. Still a massive industry, and an important platform, with an installed base of over 1.6 billion devices.

 

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