A Declining Industry, But Not An Industry in Decline?
Gartner’s latest report on the state of the PC industry painted a picture of an industry in decline — shipments are down and overall growth trends are declining. But a closer look at the data suggests a more complicated picture — with cloud, changes in consumer behavior and consolidation reshaping the landscape.
The cloud is arguably the biggest driver that's reshaping the PC industry. According to a survey from LogicMonitor (discussed in this Forbes piece), 83 percent of IT professionals surveyed believe that enterprise workloads will be in the cloud by 2020 – think Amazon AWS, Google Cloud Platform, IBM Cloud, Microsoft Azure, among others. The cloud has begun to replace some PC functionality, with many consumers and businesses changing purchasing habits accordingly. But, it's not such a straightforward picture. Sixty-six percent of respondents are worried about security with the cloud, and 60 percent have concerns over attaining governance and compliance with the cloud.
Another factor contributing to the decline in PC growth is the drastic change in consumer behavior. Mobility is key, and the increasing power of smart devices like phones and tablets are forcing a reevaluation of longstanding strategy among PC manufacturers. Companies like Lenovo are launching new technologies for their PCs, smart devices and Data Center technology solutions. Some of these new technologies include additions to their ThinkPad portfolio that emphasize technological developments, and changes to their Windows and Chromebook laptops aimed at increasing firstline worker productivity. On the cloud front, HP has put a large focus on their hybrid-cloud solutions, with Dell following suit. These emphasize the benefits of both private and public clouds – pairing cloud benefits with the value-add of private PC devices.
Paradoxically, Gartner’s report also revealed a growth story — at least, through a certain framework. While overall shipments may be declining, each of the top PC companies are still seeing significant growth in market share. This last quarter, Lenovo led the way as the world's top PC vendor with 22.5 percent of total market share—a 6.9 percent growth in sales from last year. It was followed by HP, at 21.9 percent (with 0.8 percent year-over-year growth) and with Dell at 17.6 percent (with 1.5 percent growth). These players stand to receive the biggest impact from ongoing purchase motivators like Windows refresh cycles – with the next one already underway as Microsoft prepares to sunset support for Windows 7.
The PC industry of today is far removed from the market peak of 2011, with seven consecutive years of global PC shipment decline. But a broader look at the IT market reveals substantial opportunity—especially for the market leaders with the resources and adaptability to capitalize. Where there is mystery, there is magic.