PCs – Bottom ahoy!

Tablet PCs should drive a turnaround in 2014.

• The predictions for 2014 are beginning to come in and they do not paint a pretty picture.
• PCs are expected to decline again next year by 3.8% on top of a 10.1% decline this year. (IDC).
• However, IDC is a little bit more positive than the normal “PC will decline forever” mantra as it expects that shipments will bottom out somewhere above 300m units.
• I am considerably more optimistic.
• 2013 is going to be bad but anyone who looks at stocks will have already written that off.
• What really matters is 2014.
• In 2014, I believe that tablet PCs can make enough of a difference to get the market growing again.
• Furthermore, RFM research shows that the number of content consumer users switching from PCs to tablets and smartphones is finally beginning to slow which will also help PC shipments.
• The key to making a tablet PC that appeals to a user is to create one that can function as both a laptop and a tablet with no compromise.
• It must also be as small as an iPad in tablet mode and as sleek as an ultrabook in laptop mode.
• Apple’s stance on this is clear. It believes that this is not possible and that any kind of hybrid device will always offer a compromise and consequently it has declined to participate in this market.
• This represents a huge opportunity for Microsoft and the PC makers.
• If they can get it right, they will create segment where Apple has no product.
• This has been promised for some time but 2013 has been very disappointing when it comes delivering devices that fulfil that promise.
• 2014 is looking much better and I believe that devices that work well in both orientations will encourage content creator users to upgrade their old laptops.
• The Sony Viao Tap 11 device is a good example of what is becoming possible although it is still a bit expensive.
• I think CES will see a large range of comparable devices launched which will drive shipments of tablet PCs to 34.0m units up from 9.4m units this year.
• (Tablet PCs are tablets that run a full version of Windows and can function as a full laptop).
• This combined with fewer numbers of content consumers deserting the platform in 2014 is enough to see total PCs grow from 325.3m units to 341.1m units in 2014.
• If I take tablet PCs out, then market will decline by 2.8%.
• This is positive and the main beneficiaries are going to be Microsoft, Samsung, Asustek and maybe Lenovo.
• Dell, HPQ and Acer look set to struggle as their lack of innovation will leave them towards the back end of the pack when it comes to wowing potential buyers.