Like nearly everyone else I read the newspapers, usually on line, I also read emails and articles that are of interest to us at cmx business computing.
The trend I have noticed is that articles are being written on the basis of quick one headline, one story articles but if you put them all together you get a different picture which explains a lot more about whats going on.
Towards the end of last year I read the following headlines:
“IDC says PC sales fall 14.8% this year“
“Is the PC an Endangered Species?”
“Desktops are dead in business and dying in the home”
“Microsoft’s Ballmer: ‘Nobody Ever Buys Windows. They Buy Windows PCs.”
“Die-hard XP admins just won’t let go, reveals survey”
“The PC’s not dead. It’s just gone high end“
“Analysis Cheap and nasty PCs are dying out”
“AMD will focus less on desktop CPUs”
If you read the headlines above you will come to a few conclusions; XP users are staying with the old, The Tablet is killing the PC, Only expensive PC’s are selling, AMD see the future in Tablets and smartphones.
This is not what is really happening, they are not unconnected, lets look at the headlines in groups.
PC Sales are down, cheap PC’s are not selling, AMD is looking to grow elsewhere, XP users are staying put, people buy Windows PC’s..
However the truth is rather more complicated. There are less PC’s being sold for a few reasons, The first is XP. There are so many XP PC’s in use that the cost to business of replacing them all during a shortage of money and only tempered optimism is unreasonable, it is also generally viewed that the XP platform still has plenty of life in it and that the replacements are no better, probably worse. Couple this with the fact that no-one takes security seriously. This will all reduce overall PC sales.
The second reason takes some leaping in the thought process. Cheap PC’s are predominately bought for home use where they are used for games and browsing, not serious number crunching stuff. This is the area where the Tablet has made inroads. The old adage read “why have an expensive PC when a cheap one will do”, it now reads “Why have a PC when a tablet will do” and as tablets approach the same price as a round of drinks its an argument that makes sense.
Couple this with AMD who continually fights against Intel on price and you have the reason for their lack of popularity and the need to look elsewhere for business, hence the new AMD focus.
The last bit about Windows? thats simple. If you are buying a desktop computer your first question is do I buy Apple or Windows? Thats usually a choice swayed by software availability and performance not by operating system. This is a problem where you think a software package is up against a platform whereas in reality it’s just about software. The problem about software is do you want apps and compatibles or original and powerful..
What the story should have said is;
AMD and cheaper PC’s hit by low cost tablet uptake.
by Glyn Cheeseman 30 Dec 13
The low cost tablet has been making considerable inroads into the cheap end of the PC market where users want simple applications and mainly buy them for Internet browsing. This together with users retention of XP systems has caused an overall drop in sales of PC’s by about 14%.
AMD who were the main supplier of cheap computers to this marketplace have been the main losers and have decided that they should go where the business is and focus on the smaller cheaper hand held devices together with the limited video card market.
AMD will suffer further making Intel totally dominant in the PC arena and they may find fierce competition from ARM and Snapdragon who are well established in the smartphone arena. AMD’s may fare better with video cards where their ATI arm are up against NVidea, but the smart money isn’t on ATI.
Lower costs tablets will see this part of the market shrink further as there is a race to the bottom for the price of hand-held tablets which are currently available new for £29. Effectively the PC market place has split into serious users and Internet browsers.
If you strip out lower cost machines then the market for Windows based middle to high upmarket systems has remained quite buoyant in 2013. Add to that the XP users are going to be forced to upgrade their slowing ageing machines, some of which may be up to 12 years old, which will act as an extra boost to the market in 2014. XP users will loose all updates from Microsoft as the product has reached end of life. This does not mean that systems will stop working but they may be more vulnerable to attack from the Internet. Only time will tell if they are leaving it too late, if there more attacks like Cryptlocker then look for the sudden rush in March 2014.
So In conclusions mid to top end PC sales will remain bouyant in a replacement market, Tablets will be everywhere, taking over at the bottom end due to low prices but they may see Smartphones as the main threat as we we see more Phablets, the phone and tablet combined. One thing is for sure, it’s not going to be a pretty year for cheap computers and AMD. Not when you can buy a tablet for the same price as a round down the pub against a £299 AMD computer in Tesco’s.
Take in the following information:
Business is recovering
The “fun” of Tablet computing has peaked
Windows XP is soon to be end of life.
Microsoft have discontinued Small Business Server
Microsoft Server 2003 is nearing end of life and there’s still plenty of it out there
I’ve noticed IT hardware prices are rising faster than electricity bills! – Obviously cashing in on the end of XP & Small business server.
Just had some quotes back and checked on a few prices such as Dell. It would appear that now things are picking up in IT and the fun of Business Tablet computing has peaked (Have you really tried making an excel spreadsheet on one?) coupled with the fact that there are lots of creaking Server 2003 systems out there, let alone dying XP machines and you have an upswing all gives you a chance to boost prices.
We are looking at putting our prices up too as our supplies are coming in at higher prices. We, like everyone, kept our prices on the low side, usually undercutting Dell with a better machine for £5 less. When the pressure on pricing eases and your supplies go up the you have no choice. It’s just when and how much. We are looking at putting ours up before Christmas as most businesses are focused on parties (£150 per employee tax free I read on Linkedin). We think we will go up around 10% but one of the quotes I had back for a standard i5 system with poor upgrade and small power supply from a large national competitor are going up a wacking 25%, yes 25%. That’s an extra £152.