More bad news for the PC industry: Consumers think low-end and mid-range models will do just fine.
More bad news for the beleaguered PC industry: According to IHS iSuppli, consumers will continue to favor lower-end desktop PCs and notebook computers over high-performance models for the rest of this year and beyond.
Top-end systems, priced at $1,000 and up, will account for only 6 percent of the PC market in 2012, according to an IHS report. So-called "performance" systems are expected to account for 6 percent of desktop PCs sold this year and 9 percent of notebooks, according to the firm.
In desktops, IHS expects both "mainstream" and "value" PCs to each take about 47 percent of the market. In notebooks, the firm expects low-end systems—priced at below $500—to take about 47 percent of the market, with midrange notebooks—priced at between $500 and $1,000—expected to account for about 44 percent of the market.
To recap, last month IHS forecast that PC sales would decline this year for the first time since 2001. Intel Corp. and OEMs are hoping to revive the market with compelling new ultra-thin, ultra-light notebooks that have thus far not caught on in a big way, largely due to their comparably high prices.
IHS's latest report can't bode well for the Intel camp. The chip giant is banking on consumers being willing to pay higher prices for systems that bring many of the features that have been a hit in tablets to a form factor that more closely resembles a traditional PC. But the IHS data suggests that consumers are very willing to accept what's available in a low-end or mid-range as long as it costs them less.
"For the desktop as well as the notebook PC market, the continuing domination of lower-end computers is due to the rising performance overall of PCs and their greater affordability to the purchasing public," said Peter Lin, senior analyst for compute platforms at IHS, in a statement.
According to Lin, PCs now categorized in the mainstream or value segments—while not as powerful or feature rich as the high-end systems—are powerful enough in their own right. "These more affordable systems feature current-generation technologies that prove adequate for most uses, or boast increased microprocessor power that raises the performance bar even for seemingly rudimentary machines," Lin said.
As processors become more powerful, IHS expects more computers to ship with increased computing capability. Quad-core processors, for example, will be found in 179 million notebook PCs by 2016—about 59 percent of all notebooks expected to be in the market by then, according to IHS.
Much has been said and written about the dawn of the post PC era. Consumers are proving willing to forgo new PC purchases in favor of tablets, smartphones and other mobile devices that are more convenient to use and offer some but not all of the capabilities of PCs. For those customers who are buying new PCs, the top of the line is not worth the extra money. With mid- and low-end PCs sporting more powerful processors, the overwhelming majority of people simply don't feel like digging deeper in their wallets for bleeding edge technology.
What a change. Long ago, you couldn't find a PC for less than $1,000!
Intel used to regularly showcase emerging high performance apps that would need its next-gen CPU performance. They haven't said anything on that front in a while.
These days the main apps are all about the Web so network not CPU performance is more key.
3) Niche. A/V processing/encoding.
I'm building a Win8/RADI 0-SSD box for this purpose, and this purpose solo.
The rest of my world will live on Elder Intel Mac Mini's and Atom Net top computers for Skype and Email
Only two places I currently see high-end desktops utilized are:
1) Traditional hardcore gamers will continue to demand high-end graphics cards and quad-plus core CPUs. This market is however changing rapidly due to the surge of gaming on handheld devices (iPhone, iPad, etc).
2) Business workstations. I work for a ~200 person engineering company and our mechanical/CAD folks typically use high-end PCs for everyday graphics and compute intensive applications such as Pro/ENGINEER and Cadence Allegro. I'd imagine similar for other businesses i.e. graphic design, etc. Sure, we have servers running Xeon/etc for long term simulations and such but the high end PC still sees quite a bit of usage.
Further, with PCs having a lifetime of 5 years or so, the lack of innovation in the PC market, and weak economy, replacement purchases are being put off. Bad news for the PC industry.
Same, Jack! I also have the VAIO and it stays on Stamina pretty much permanently, but that's because I have never really noticed it lagging enough for me to want to speed it up. PC gaming, for the most part, has become such a niche that for most of us, the speed of a regular core i5 or core i7 machine is as fast as we'd ever need. I did crack up a little yesterday when I saw an episode of Dexter where one of the lab guys was using an AlienWare gaming PC to run data though... sure, it only has 45 minutes of battery life, but why not?? ;)
My work Vaio has a switch to switch between "Stamina" and "Speed". The trouble is that you have to reboot for the switch to take effect. So, it stays on "Stamina", because battery life is more useful to me than speed.
My family's needs for PC computing requires a nominal system for email, facebook, and various game apps. We have absolutely no need for a high end PC or Ultrabook. We have a 3 year old laptop and a 4 year old PC that work fine. As others have mentioned, there are no killer apps that require additional computing power or quad core capability. Tablets need to improve but we already own two and plan on purchasing another this holiday season. Our choice for tablets was based solely on their monility aspect. And even for these we didn't go high-end and they work fine for our needs (B&N Nook Tablet and Kindle Fire). Yes, there is a bit of lag on these devices but for the money we don't complain. And yes, the economy does play into our buying decisions -- do more with less, so to speak... I agree with Les. I am most comfortable with my mouse, keyboard, and monitor but my young kids like the tablets better. I am not a technical expert but I think the high end PC market for the mass population is dead. There is no more chasing the next processor for me and many people I talk to are saying the same thing. In the past the PC had to try to keep up with software developments but that is not the case anymore. I sure hope Intel has something else up their sleeve other than Ultrabooks...
Another reason to shun the high-end is power consumption. My pc has enough compute and graphics power to suit my needs... and it's completely silent.
The game is evolving where increased performance must not come at the expense of more power consumption. On the portable and mobile side size and weight are king. Smaller sizes (thinner) leave less room (and weight) for the battery.
I like my smart phone for its portability but it's of limited functionality, at least from a productivity standpoint. Tablets aren't there yet but will be in not too distant future.
I still like my full keyboard, mouse, 27" 2560 x 1440 screen and decent 3.1 sound at home. No need for a high-end quad core though.
The high-end is only needed for serious gaming and various workstation applications, hardly a mass market.
@Bert- your point is well taken. I think when people refer to the post PC era, they aren't saying that the PC will disappear. People will continue to use PCs and replace them. But annual PC sales growth will no longer be a given, and the PC will drive less innovation.
I'm not convinced that this is a foregone conclusion. But people are showing that they are willing to buy a tablet instead of adding a new PC, and they are showing that low and mid range PCs--without all the latest and greatest bells and whistles--suit their needs just fine.