CEOs Whitman and Dell bullish on PC sales

By on
CEOs Whitman and Dell bullish on PC sales
Chief executive Michael Dell

IDC reported Tuesday PC shipments are forecast to tank 10.1 percent in 2013, but don't tell that to Meg Whitman or Michael Dell. Both CEOs are bullish on PC sales and remain steadfast that the PC market is far from dead.

"The obituary of the PC has been written 25 times," said Michael Dell, CEO of Dell, in an interview with CRN US last month. "The term 'post-PC era' was first coined in 1999 by IBM. At the time, there were about 120 million PCs sold per year. Now there are 450 million PCs sold per year. So the post-PC era has been better for the PC than the pre-post-PC era," he said.

According to IDC, PC shipments are forecast to plummet double digits in 2013, adding the drop is the "most severe" yearly decline ever. The PC market, IDC said, is saturated, with no room for growth both in the domestic and emerging markets. IDC said that there is little hope for PC growth beyond the market for system replacements and even then, IDC said, it anticipates a further 3.8 percent decline for 2014.

IDC said PC shipment numbers will hit rock bottom at just above 300 million per year. The silver lining for OEM partners is that IDC said commercial sales buoyed consumer sales. Consumer PC shipment sales nosedived 15 percent, without taking into account commercial sales. Commercial PC sales (includes desktops and notebooks), on the other hand, dropped a mere 5 percent year-over-year.  

IDC credits the "stability" in the commercial market to "PC investment planning, a smaller impact from tablets, and to replacements of Windows XP systems before the end of support planned for 2014." But the PC market, as a whole, just can't compete with a changing mobile world dominated by tablets, IDC reported.

"I don't think tablets are going to overtake PCs in business like they have in consumer," said HP CEO Whitman in an interview with CRN US last week, after HP posted a 4 percent increase in commercial PC sales for its fourth fiscal quarter ended 31 October. "Business people have to do real work. They have got to do spreadsheets. They have got to do PowerPoint presentations. They have got to do things frankly that you need a heftier machine for," she said.

HP posted its first PC unit growth in the quarter since the first quarter of 2012, said Whitman. HP estimated that it gained 1.8 points of share over the prior year and 1.2 points of share sequentially.

Sales for Dell's PC business were up 21 percent, according to the company's fiscal third-quarter earnings ending 18 November. The mass exodus to the iPad in the commercial space is not taking place and that is saving the PC's bacon, said Rajani Singh, IDC senior research analyst, personal computers. "Consumers adopt new tech such as the iPad much more rapidly than the commercial space. Businesses are conservative," she said.

Singh credits HP and Dell -- which together sell about half of all PCs worldwide -- for lifting the commercial sales market. "Both companies have been doing a lot of alignment with channel partners and that has helped them streamline sales to key markets such as SMB," said Singh.

Michael Dell told CRN he is cautiously optimistic about future PC sales for his company. "The PC is a challenge. We are assuming that that business will contract. We have very modest assumptions for that business. Dell will be a consolidator and look to gain share. But PC is not our primary objective. Our primary [objectives are to] grow enterprise storage solutions, security, software. Those are things our partners are helping us do."

One of the few bright spots for the PC market are Windows-based 2-in-1 devices that function as a tablet and a notebook, said IDC. Those devices are expected to drive sales for Windows PCs, said Loren Loverde, vice president, Worldwide Quarterly PC Trackers. "These Windows devices are projected to account for 10 percent of a combined PC & Windows Tablet market by 2016, making them an important growth segment for the PC ecosystem," Loverde said.

This article originally appeared at crn.com

Got a news tip for our journalists? Share it with us anonymously here.
Copyright © 2018 The Channel Company, LLC. All rights reserved.
Tags:

Most Read Articles

You must be a registered member of CRN to post a comment.
| Register

Poll

You have to spend $10k on new business hardware. What do you buy?
Collaboration hardware
Enormous monitors
New smartphones
New PCs
Minimum spec Mac Pro for $9,990.
We'd fake some paperwork and have a party instead
View poll archive

Log In

Username / Email:
Password:
  |  Forgot your password?