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PC market decline forces devices to evolve

Despite the well-documented decline of the PC market, opportunities around 2-in-1s, niche markets and Windows 10 arise to keep businesses buying new computers.

As demand for new PCs in business continues to shrink, hardware and operating system advancements could keep IT interested.

Vendors continue to make progress with PCs through longer battery life, faster processors, more memory, better displays, and lighter and thinner casings. Additionally, many PCs now boast touchscreen displays and 2-in-1 form factors to entice organizations with mobile workers -- and to accommodate Windows 10, which could also drive future sales. But, as it stands now, the worldwide PC install base will decrease from 1.49 million units last year to 1.33 million units by 2019, according to Gartner.

"Smartphones and tablets cut into the market, but you need desktops and laptops as the main devices for workers," said Mikako Kitagawa, principal analyst at Gartner. "It doesn't mean PCs are going to go away."

What's a PC vendor to do?

The PC market decline has led to small vendors getting smaller and large vendors getting larger, Kitagawa said. Vendors had to reduce prices to address the decrease in demand, leading to lower profit margins on fewer sales -- a tougher hill to climb for a smaller provider than for a larger one. The four largest vendors -- Lenovo, Dell, HP Inc. and Apple -- continue to collect more market share, while the market itself shrinks.

"The market is much more of a commodity market," Kitagawa said. "You won't survive if you don't sell a lot of them. That's a challenge."

Evolving the hardware and software to meet businesses' needs for mobile users has been one way to stand out in the market. Microsoft's Surface device has become the most popular 2-in-1 since its release in 2012, and the company's Continuum feature attempts to bridge the gap between mobile and PC interfaces.

The PC market is still there in the enterprise.
Jeff Janovichcloud solutions architect, Carlisle Construction Materials

Some PC vendors have found their place in niche markets. For example, Panasonic Corp. made a name for itself with its ruggedized laptops and hybrid devices for verticals such as military and construction, which need devices that can withstand the elements and are tough to break.

Despite the PC market decline, the PC form factor is still more ideal for getting a lot of work done than the smaller screen and lower processing power of a smartphone or tablet. At Carlisle Construction Materials in Carlisle, Pa., for instance, field workers use iPads to enter information into apps, check email and more. But if employees need to do anything more complex, they'd rather do it on a PC, said Jeff Janovich, a cloud solutions architect at the company.

"Mobile devices are fine for basic business tasks on Office apps, but for any other extensive work, it doesn't cut it," Janovich said. "The PC market is still there in the enterprise."

Windows 10 to the rescue

Businesses typically replace their PCs every three to five years. But that lifecycle is flexible, and in some cases, businesses might ditch their current PCs sooner when adopting Windows 10, said Doug Grosfield, president and CEO of Five Nines IT Solutions, a Dell and Lenovo partner in Kitchener, Ont.

If a user has a laptop from 2008, for example, and is trying to run Windows 10 on it, he or she may notice shortfalls, because Windows 10 is ideal for newer PCs.

"We are seeing pressure put on businesses to replace hardware in an accelerated fashion, because the advancements of OSes require a little more advanced technology on the hardware side," Grosfield said.

Windows 7 end of support is Jan. 14, 2020, so in the next four years, there will be a growing incentive for businesses to move to Windows 10, Grosfield said.

"There will be an upsurge in PC sales because of that," he said.

Additionally, today's workforce is mostly comprised of Millennials, driving organizations to stay current. With outdated PCs, millennials will not be happy at work, said Patrick Moorhead, president and principal analyst of Moor Insights and Strategy, a research firm in Austin, Texas.

"Never before have workers decided where to work based on the tools and equipment provided as much as they do now," Moorhead said. "Its thin PCs that you're not embarrassed to be seen with, not a clunker, [and] good wireless and displays, because employees blend work and play."

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