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.
Hey Dylan. You started out great, and then you felt you had to get back to the "post PC era" mantra.
The original point was that people (including myself btw) are buying mid-level PCs and laptops/notebooks, rather than top end systems (e.g. Intel Core i5 vs i7). And you gave good reasons for this. Fast, quad core performance that can handily run the new apps, codecs, and up to date virus shields. Where the older single-core systems became an irritating experience.
But as far as I can tell, the last paragraph is a non sequitur. Nothing discussed previously said anything about "post-PC" diddly, as far as I can tell. And I did re-read the article! My take continues to be that the PC and notebook market is essentially saturated, and what you're seeing is mostly replacement purchases. The tablet and smartphone markets aren't there yet. End of story.
I agree with all points made above. The soft economy is undoubtedly a factor making it hard to move premium products in any industry. But, yes, where is the killer app? I am thinking about buying a new PC and think I will probably spend around $500. For the rather mundane tasks that my family and I will use it for, I have no idea why I would be compelled to spend more.
Yes, this be may be another signal for the end of the desktop PC. Thinking about notebooks: most people I know love the netbooks.
Small, light-weight, have all they need and they are cheap! But they seem to disappear while the industry is pushing for ultrabooks which are quite more expensive. Is it the win margin that the industry pushes for ultrabooks?
I agree that this is not so surprising given the current economic climate, but I also think that we are missing "killer apps" to use some of that surplus computing power. As has been expressed on this forum before, there is not as much innovation coming out of the PC industry these days. Consumers typically don't "need" higher powered computers because there are few compelling applications that require them.