What’s with PC Sales?

The February 2nd issue of Business Week has an article entitled “Why the PC Market Is Suddenly So Weak.” They note that IDC reported that PC unit sales were down 0.4% in the 4th Quarter of 2008. Further they project a drop in PC sales for 2009 of 5.3%. Roger Kay, a consultant with Endpoint Technologies stated, “It’s different than we have experienced before. You have to throw out the old rules and start fresh.”

I submit that while the economy is playing a part in this problem, it is really brought on by a failure of the primary driver of growth in the PC business, which is not the economy, but rather the Microsoft/Intel duopoly. The way the “game” is played is that Microsoft introduces a new operating system and Intel introduces new, more powerful processors. The new operating system won’t run effectively on older PCs because it is likely to be a resource hog, so new PCs are required with the new, more powerful Intel (or AMD) processors. The cool features and easier to use capabilities of the new operating system make it “all worthwhile.”

At least that’s how it is supposed to work. But then came the catastrophe called Vista.

Vista appears to have been such an ill-conceived and poorly accepted operating system that not only are many companies not upgrading, they are NOT upgrading. That is, they are purposefully not replacing their PCs with newer ones to avoid being forced to use Vista. I predict that once Microsoft introduces Windows 7, and assuming it is a good product, PC sales will increase. This is likely to correspond with the economic recovery given the projected introduction date for Windows 7, so many will conclude that PC sales picked up due to the recovery. Maybe, but then again if your business driver is broken, sales won’t happen until you fix it.


This entry was posted in Down economy and tagged , , , , , , , , . Bookmark the permalink.

2 Responses to What’s with PC Sales?

  1. Dave J. says:

    I’m not sure if this helps PC sales, but Microsoft is going to cash-in on 7 when all the people using the beta want to PAY for 7 instead of using Vista.

    And this will be retail sales of upgrades, not OEM sales, so profitability will be high.

    • Mitch/Ralph says:

      You make a good point, though if Windows 7 is not materially better, some of those beta users may either return to Vista, or pay to go back to XP. We can hope that Windows 7 is a good product becuase as far as I can tell, Vista is the best thing that ever happened to Apple’s computer business since the MAC was invented.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s