PC Growth isn’t Flat, Windows Is

by Ben Bajarin   |   July 13th, 2012

We are living in fascinating times as the personal computing industry is undergoing its biggest transformation since its inception. Tablet computing is leading the charge and forcing nearly everyone in the industry to relearn what they knew about personal computing and its future.

There is no doubt that personal computing is evolving and transforming. With my role as an industry analyst, I believe it is important to present information to the industry which reflects what is accurately happening in the market at any given time. It is for this reason that I believe that not including tablets in industry wide PC sales numbers and forecasts is disingenuous and does not accurately reflect market conditions.

Recent quarter estimates from IDC and Gartner made headlines as they point out that PC growth is remaining relatively flat. There are more theories surrounding this point than I have time to get into but the bottom line is that there is simply no growth happening right now with desktops and clamshell notebooks.

So what is happening in the market and what can we learn about the current conditions within consumer markets? A series of interesting data points lead to an important observation. That observation is that PCs aren’t flat or in decline, demand for the Windows platform is.

Horace Dediu at Asymco created a fascinating chart and series of data points where he broke down the Windows platform advantage and how it is eroding. In the following chart he created he points out how in 2004 the Windows platform peaked in its multiple of Windows products shipped per single Mac shipped. After 2004 multiples began to decrease and starting in 2007 with the release of the iPhone, there is a steady and rapid decline of the Windows platform advantage.

This chart can be summed up with the following significant point Horace makes in his article:

“If we consider all the devices Apple sells, the whittling becomes even more significant and the multiple drops to below 2. Seen this way, Post-PC devices wiped out of leverage faster than it was originally built. They not only reversed the advantage but cancelled it altogether.”

Now turning to the flat notebook and desktop growth trend. My conviction is that tablet computers (defined as tablets with screen sizes larger than 9.7 inches) is an evolution of the computing form factor but still a personal computer. This is why I agree with Canalys who includes tablets as PCs in their market data.

I shared my opinion about tablets and the new era of personal computing in this column.

If we were to include tablets into the data for personal computers we would see that the market is not in decline but actually a steep incline. In fact if we were to include tablets into personal computer shipment forecasts for 2012 we would see over 100% year over year growth.

By choosing to not include tablets we will be lucky if we see 20% growth in this calendar year. But as I stated at the beginning of this column, to not include tablets in PC shipments would not be an accurate reflection of what is happening in the market.

We can debate semantics all day as to whether or not tablets should be considered PCs. All the while our interviews with consumers are consistently proving that they are using their iPads as computers to do many, and in some cases all, of the regular tasks they used to do with their notebooks. Given the ways we see consumers using iPads there is simply no denying that the iPad is a personal computer. Some people will have their personal computing needs met by a tablet, others by notebooks, and others by desktops, or even perhaps some combination of the three.

The iPad, and tablets in general, simply represent an evolution of the form and function of a personal computer. Therefore we should count them as PCs but breakout their specific shipment growth amidst other computing form factors like we do already with desktops and notebooks.

Now obviously if we did this we would show that most if not all of the PC growth belongs to Apple. But as I said at the beginning I am interested in accurately presenting what is happening in the industry and most of the growth does in fact belong to Apple.

So now the question remains as to whether or not Windows 8 will be the great equalizer and inject growth into PCs, both clamshell and tablet, for non Apple vendors. That is a question I will let linger until a later time.

However, this fact remains and needs to be continually emphasized. If we step back and look at what is happening holistically in the personal computer market, it is clear that we are not in a phase of flat or declining growth, rather we are at the beginning of a rapid and exciting growth phase.

Ben Bajarin

Ben Bajarin is a Principal Analyst at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research. He is a husband, father, gadget enthusiast, trend spotter, early adopter and hobby farmer. Full Bio
  • http://www.facebook.com/profile.php?id=100000747530164 Michael Curry

    Around a year ago we notified our IT help desk provider WorkSpace to submit an analysis for support of iPad within our user base. We expected at least 10% adoption within a year or two. A few weeks ago I was shocked that over 60% of our personnel moved to iPad within the last 8 months. The overall adoption to tablet is much stronger than we ever expected. The folks over at WorkSpace tell us no rise or fall in support so I guess the impact was minimal overall.

    • FalKirk

      That is a great story Michael. Thank you for sharing your experience and your insight with me and with all of us.

  • FalKirk

    “If we were to include tablets into the data for personal computers we would see that the market is not in decline but actually a steep incline.”

    Exactly.

    What a great article. There’s so many points that I could comment on, but let me just focus on your statement, above.

    The debate over whether a tablet is a PC or a personal computing device is not only silly, but it is hiding, rather than revealing, reality. The sales and use cases for personal computing devices is growing and growing rapidly. More people are using computers today than ever before and that number is about to explode. Smartphone sales have not peaked and, incredibly, tablet sales are growing at an even faster pace than phones.

    The debate, I think, should be focused on operating systems and, even more broadly, on touch operating systems vs. mouse/stylus operating systems. Apple has placed their devices in two separate camps. Phones and tablets use a touch operating system (Post-PC). Notebooks and desktops use a mouse (pixel specific) operating system (PC). Microsoft is arguing that you can use the traditional mouse input and simply add touch everywhere (PC+).

    These philosophies are diametrically opposed – they can’t both be right. It’s hard to argue, as Microsoft does, that Apple has got it wrong. Apple’s phone and tablet sales say otherwise. However, this Fall, Microsoft gets to make its case. With Windows 8 on the desktop, Windows 8 on the tablet and Windows RT on the tablet, Microsoft is arguing that, yes, touch is great, but Apple only got it half right. A touch user interface need not be separate but should, instead, be integrated into existing operating systems (or, at least, touch should be integrated into all Windows operating systems).

    It’s two dueling hypotheses that are about to go from theoretical to field tested. Can’t wait.

    • http://twitter.com/AdamChew1 Adam C

      I am kind of curious regarding the control of the cursor in the Surface environment, will it be as responsive with a mouse, a stylus or a finger. It will take great coding for it to detect a finger being used or a stylus or a mouse.

      I am no expert but I will see a lot of confusion as people learn to use the Surface.

  • Rich

    Considering the phenomenal popularity of the iPad, the Surface is going to have to be *seriously* good to attack the iPad in any meaningful way.

  • http://twitter.com/the_other_jon Jonathan Polley

    When laptops were first released, where they excluded from the “PC market” as well? Just curious.

    • steve_wildstrom

      No, laptops were always considered PCs (or Macs, once Apple finally came up with one.) But for many years, laptops were a minuscule segment of the market, so it didn’t matter much.

      • fring

        Hmmmm…that would be the 1991 PowerBook which set the standard for ALL laptops that followed.

        • http://pulse.yahoo.com/_G6VVWF2ONHKQ6S26IQUWWTOMWA Wolfgang Mozart

          Absolutely. All the PCs had the keys up by the front edge of the keyboard. The Powerbook 100 looked so odd at the time. Mac laptops look so far ahead of their time, I’ve seen ones worth essentially nothing (because they are so incredibly old) selling for much more than a usable PC at auction. I’m a Mac guy, but I had to laugh at that, even I would have bought a 3 year old PC over a 10 year old Mac. Well, so long as it was not a really cool old Mac… ;-)

  • Shashi Prabhakar

    This debate while interesting does nothing to change the confusion from the fact that “PC” could refer to “Windows PC’s” or “Personal Computers (including Mac’s)”. I think most authors hide their personal biases in this ambiguity.

    Clearly we are in a “post-PC” (post-windows) era, simultaneously we are also in a “post-PC” (beige desktop box form factor) era.

    Further PC itself is a misnomer in this new era. We have “Personal Information Assistants/ Personal Communication Devices” that are capable of computation. The term “Personal Computer” is antiquated and outdated and is no longer capable of providing comprehensive meaning or definition it once did.

    • steve_wildstrom

      Earlier today, my friend Roger Kay suggested that we call smartphones, tablets, and traditional PCs all “endpoint devices.” Roger happens to run a firm called Endpoint Technologies and I’m not sure that is the best name, but I think we need an umbrella term to describe all of these personal computing devices and end the argument over what should be called what.