4 reasons why PC sales may not recover soon

by CXOtoday News Desk    Apr 12, 2013

PC sales

Global PC shipments decined 11.2 percent to 79.2 million units in the three months to March, the biggest decline in four years. The last such dip was in 2009, when sales of PC dropped to less than 80 million during the recession in the US. The first quarter of 2013, PC shipments across regions showed a decline, with EMEA or Europe, Middle East and Africa registering the steepest decline. Understandably so as Europe is facing its worst financial crisis.

Pundits are predicting that this downward spiral in PC shipments is bound to continue with soaring tablet sales. While we won’t bet on it, the reasons for the decline in PC sales are primarily due to four factors.

Budget constraints: Enterprises make up for the bulk of the PCs sold worldwide. Considering the short PC hardware and software lifecycles most organizations tend to replace their PCs once in three years.  With the on-going economic downturn companies around the world have pared down their IT budgets. It is possible that many of them who were due for PC upgrades this year have deferred it by another year.

Attrition: A number of large enterprises have considerably reduced the size of their workforces over the last three-five years due to the global economic decline. Consequently, even if many of them were ready for an upgrade, the volumes needed by them would have been substantially less than what it would have been earlier. If a company had 100,000 people working in the pre-recession days, that organization would now have 20 or 30% lesser employees.

Mobility adoption: A number of companies, particularly small and medium companies are gradually embracing mobile clients. Many are also encouraging their employees to bring their own tablets or mobile phones to reduce expenditure on hardware.  This could also have impacted PC shipments, to a lesser extent though.

Emerging Markets: Emerging markets such as India, China and Brazil were expected to cushion the rapid reduction of PC buying in the West during the economic meltdown. The shift has been gradual, while PC sales have increased in emerging markets, the scale has not been large enough to offset the decline in the traditional Western markets.