With a world gone crazy over sophisticated smartphones, tablets and hybrid laptops, worldwide PC shipments have dropped over the past year.
Since the second quarter of 2012, the decrease in PC shipments worldwide went from about 85 million to about 76 million in the second quarter of 2013. That's a drop of 11%.
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While consumers may shift from PCs to less-expensive Android and Apple-powered devices, the numbers don't tell the whole story. In fact, the PC market isn't as bad as it sounds, and analysts say that corporate PC reliance will continue.
"Q2 tends to be a low quarter in general," said Bob O'Donnell, vice president of display research at IDC. "Quarter 3 tends to pick up because of back-to-school, and Quarter 4 increases because some fiscal years end in December, so some businesses might feel the need for an upgrade."
The PC shipment market also saw a drop because of the slow economies in Europe and China, O'Donnell said.
"The numbers are deceiving," said Mikako Kitagawa, a principal research analyst at Gartner Inc. "Desktops are still popular in the business field because the security and performance are better than what you'd get from other devices."
Companies still use PCs over tablets because many business applications run better on PCs, the screens are bigger, and most people prefer a physical keyboard, O'Donnell said.
Desktop PCs also have a longer life.
"Desktops are devices that won't break as easily as laptops because they're in a fixed location," Kitagawa said. "Laptops could break because of the repeated opening and closing motion of the screen, [beverage] spills, or employees could lose it when they travel."
Tablets won't replace PCs
When it comes to enterprises buying tablets to replace PCs, Kitagawa said it isn't common.
"Not many companies are buying tablets, because it's something they don't want to spend money on," Kitagawa said. "Most want to minimize expenses. However, some might purchase a select few for employees who are in remote locations or are in the field a lot."
Many employees do use tablets for work, and more and more companies have allowed them to do so as part of bring your own device (BYOD) policies. But tablets and hybrid laptops aren't replacing desktops; they are supplemental.
"Businesses can't live without desktops," O'Donnell said. "But the use of tablets, in addition to using a desktop, is becoming more commonplace. Right now, we're seeing a lot of BYOD, and we're going to see more going forward."
Many companies see how BYOD works and, over the next couple of years, most large companies will have some sort of BYOD policy, he said. The biggest current shift is that companies are switching from Windows XP to Windows 7 (despite the availability of Windows 8). The switch could lead to an increase in PC shipments in the next few quarters, especially since Windows XP support will end in April 2014, O'Donnell said.
"We're starting to see the last surge of the shift," he said. "Companies need to make decisions. Should we get new computers and hardware, update our machines or consider a third option of going toward desktop virtualization?" Windows 8 migrations would also require new PCs in many cases, but the operating system hasn't led to corporate PC migrations so far for a number of reasons.
"I haven't seen much Windows 8 adoption in businesses," O'Donnell said. "It's radically different [than what they've been using], which makes things difficult. Windows 8 will be improved with 8.1, and more companies might consider it then, but there are still challenges. Windows 7 runs real well."
Windows 8 is also too new.
"They have to test to see if its programs will work on a new OS," Kitagawa said. "Testing periods usually take about eight to 12 months." Two computer companies that were hit the hardest in Q2 2013 were Acer Group and ASUS. The market growth for Acer Group from Q2 2012 to Q2 2013 was -35.3%, and it was -20.5% for ASUS during that same period, Gartner reported.
O'Donnell said those two companies were hit hard for a few reasons.
Each was focused too much on the consumer market. While both vendors are popular in Europe and China, now isn't the best time for businesses to purchase new computers because of the slow economy in those places.
Hewlett-Packard and Dell Inc. saw their market-share growth drop in Q2 2013, but that wasn't as bad as what Acer and ASUS faced. From Q2 2012 to Q2 2013, HP, which recommitted to delivering PCs in June, was down 4.8%. During the same time period, Dell suffered a loss of 3.9%, according to Gartner.