What next for desktop PCs?

If you type ‘death of the desktop PC’ into Google and hit ‘enter’, the search engine will retrieve about 1,120,000 results. Go on, have a go right now.

Of the 10 articles listed on the first results page (at the time of writing), half are very much of the opinion that the desktop PC is as dead as John Cleese’s parrot in Monty Python’s famous dead parrot sketch. Two articles reckon the desktop PC market is just resting, in the manner of Michael Palin’s resistant shopkeeper, while the remaining three think the jury is still out.

Helpfully, Google suggests some related searches, including: ‘are desktop PCs dead’, ‘death of the PC’ and ‘PC sales decline 2016’. Ignoring ‘death of political correctness’, this doesn’t sound good.

So is the desktop PC market dead? Of course not, let’s clear that up right now. 

At a very basic level, there are some tasks that just cannot be replicated on a phone or tablet – serious multi-tasking, high-end gaming, importing and editing industrial volumes of photo and video content, writing and researching this article, you get the picture. Until someone invents software and hardware that can read thoughts, a traditional keyboard and mouse combo is just easier for certain processes.

But the desktop PC market is evolving, and that’s a good thing. What’s for certain is the time when a big box, tower or all-in-one monitor was the focal point of all computing activity in the home or office is long gone.

Instead, we are in an era where devices are optimised for different kinds of tasks or physical environments – which we won’t waste words describing here – we’re all three or four screeners now.

What’s the current state of play in terms of the raw numbers? The obvious place to start is with the analysts, and IDC’s quarterly updates are as good a bell weather as any. In June, it predicted that worldwide PC shipments will decline by 7.3 per cent in 2016, albeit with progressively smaller declines through 2017, followed by stable volume in 2018.

“We are seeing a greater need for flexibility in terms of how devices are managed.” 
Tom Sykes, Rockford IT

However, growth in 2016 is now expected to be roughly two per cent below its earlier projections, as conditions have been weaker than expected. In Q1 2016, growth came in at -12.5 per cent, just below IDC’s forecast of -11.3 per cent. It says ‘inhibitors’ such as weak currencies, depressed commodity prices, political uncertainty and delayed projects continue to constrain shipments.

The macro trend is that although growth rates for devices such as phones and tablets continue to fall, potentially reducing the competitive pressure on PCs, we have not seen that translate into stronger PC shipments, particularly desktops. The financial pressure on consumers across regions, and the availability of alternatives (such as delaying a PC replacement by using a free Windows 10 upgrade or relying more on other devices) continues to pressure shipments. Ultimately, IDC predicts a -1.8 per cent CAGR for desktop PC shipments by 2020, from 103.3 million units to 94.2 million units.

The thing is, those forecasts were made before Brexit happened and, thinking specifically of the UK technology market, that could change things quite considerably.

Gartner was quick to publish a revised IT spending outlook following the UK’s decision to leave the EU and now expects worldwide IT spending to be flat in 2016, totalling $3.41 trillion. This is actually up from last quarter’s forecast of -0.5 per cent growth, mainly due to currency fluctuations.

John-David Lovelock, research vice president at Gartner, says: “The current Gartner Worldwide IT Spending Forecast assumes that the UK would not exit the European Union. With the UK’s exit, there will likely be an erosion in business confidence and price increases which will impact UK, Western Europe and worldwide IT spending.”

Gartner asserts the leave vote will quickly affect IT spending in the UK and in Europe, while other changes will take longer, predicting that staff may be the largest immediate issue, with the long-term uncertainty in work status making the UK ‘less attractive’ to new foreign workers. As such, retaining current non-UK staff and having less access to qualified new hires from abroad will impair UK IT departments.

You can read more about Brexit in our full report on page 15. For now, what does the UK channel think of the various futures outlined by the experts above? Clearly, there are separate considerations for the consumer and B2B markets.

“The desktop PC market is maturing and has been shrinking for some time,” says Ashley Sterland, Commercial Director at distributor The Change Organisation. “Smaller, more portable and, let’s face it, sexier devices are filling the shoes of a desk-based PC, especially for consumers. Even in the business world, despite PCs being an employee’s main endpoint device, this position is being eroded more by laptops.”

Sterland adds that compounding this decline in the corporate world is the fact that businesses aren’t refreshing their PCs as often as they used to, with a typical refresh cycle now five years as opposed to three years in days of yore. Interestingly – Brexits and pressure from other form factors aside – the longer refresh cycles could be partially down to new software not pushing hardware to its limits, which impacts both consumer and business buyers. For example, if more and more software is being run and processed in the cloud, there isn’t the same pressure to have machines running with the latest and greatest specs. And then you have Microsoft’s evolving approach to Windows.

“An operating system upgrade used to be a good excuse to upgrade your hardware, but Windows 8 wasn’t met with much enthusiasm and so many decided to stick with Windows 7, which they knew their current PCs could handle,” says Sterland. “Microsoft is claiming the current version of Windows will be the last, and subsequent improvements will be by means of updates rather than whole OS refreshes, so what will be the next big software ‘event’ that persuades people to upgrade their hardware?”

“Smaller, more portable and, let’s face it, sexier devices are filling the shoes of a desk-based PC.”
Ashley Sterland, The Change Organisation

But there are reasons to be cheerful. In addition to the specific tasks that are naturally more suited to desktop machines mentioned earlier, there’s also an increasing trend towards cloud-based software and apps ‘handing over’ between different devices based on the user’s location. Then the associated considerations that come with that, such as security.

“[Desktop computers] are going to have a place for the foreseeable future, but we are seeing an increasing need for flexibility in this area in terms of how devices are managed and controlled,” says Tom Sykes, CEO at managed IT solutions provider Rockford IT. “This brings challenges, especially in securing these devices from malware, threats, reporting and alerting.”

Sykes adds that Rockford IT is seeing that there is an evolving hybrid model for desktop PCs, where some apps and browsers are run locally, but with a published or web app deployment of other applications as suits. Ultimately, this means that desktop machines need to be powerful and, in the business arena in
particular, have strong management features.

Indeed, it’s arguable that perhaps the biggest near-term boon for desktop machines this year will come from the business sector, which has spent the best part of 12 months evaluating Windows 10. Many analysts think that we’ll start to see large scale deployment of devices with the latest Microsoft OS towards the end of this year.

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