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.
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?? ;)
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.
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
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.
[disclaimer: I work for Intel, but my opinions are my own and do not reflect the company's guidance]
You *have* reported Intel's latest thrust in apps, Rick. Partnering with Nuance to make voice-driven PCs, and the whole Perceptual Computing initiative, for which a SDK was just released. Convertibles and dockable tablets with touch are just the beginning of the re-invention of the PC. Don't count us out quite yet. :D
Intel's other problem is that when making a choice between a higher processor clock speed (or more cores) and more memory, more memory is almost always the right choice. A SSD might be above a faster CPU, but they are still too expensive for the $500 PC. Most CPUs have enough performance for the consumer workload, but browsers use lots of memory, and consumers only close a window when they reboot the machine.
I have to disagree with those who assume that any status quo of today will remain the status quo for all time!
Yes, we are in a strange phase now, where lots of casual users are buying up smartphones and tablets, and therefore the manufacturers of computing devices and software are dedicating a lot of time and effort to meet these demands. But it's also true that these handheld devices are approaching mid-level PCs in their computing power.
Therefore, the only logical conclusion is that the current status quo will soon end, and the apps will be demanding more power from the handhelds, and consequently also putting upward pressure on PC hardware.
After all, growth curves are always S curves. Handheld devices will also eventually saturate the market, and the device makers and software developers are going to want to have something new to sell. Innovation will not end.
I can't imagine that desktops are going away (even if there are now lots of other options for non-power home users), and Microsoft Windows and office products look like they are going to continue to dominate the desktop.
Considering Windows 8 provides a fuller experience with a touch screen (even on a desktop) I agree with the idea of the re-invention of the PC and I think it applies to the desktop as well.
Bert, I'm impressed at your ability to see through the fog, look beyond the 'now', and state reality as it is. Your views seem neither biased nor radical compared to most others I've seen post on EETimes.
From historical trends, you're applying concepts to still emerging markets (mobile) and concluding well before anyone's even thought about this, that the mobile market will see its bright light fade sooner than anyone expects.
The only thing missing here is, what's next? People will have cheap, powerful, efficient, quality computing power. Will the computing industry turn into something like the memory industry? Those that aren't bringing down the costs will be pushed out rapidly because the margins will be so little?
Any ideas on what you see coming, or even what you would like to see coming?