The PCs New Role as an Appliance

on April 22, 2013
Reading Time: 3 minutes

I have written and spoken often about my conviction that the role of the PC is changing. The personal computer as defined by a desktop and clamshell form factor was, for many years, the only PC in our lives. Now we have tablets and smartphones in our lives and they have usurped the value the market once attributed to traditional PCs.

On Friday I outlined how the traditional PC, by definition of desktop or notebook, used to be the benchmark for the health of the technology industry. Every year we looked at PC sales as an indicator for growth. This is why many in the media and pundits made such a big deal at all the recent news that PC sales have been slumping. On the surface it seems like a big deal but in reality it is simply a sign of the paradigm shift the technology industry is going through. One where ultra mobile devices like tablets and smartphones will define the future of personal computing.

A Shift in Value

When I was first learning to do consumer market research, one of the things I found most interesting was to discern where the consumer mindset found value. There is a great deal of mindset diversity in the consumer market as value is percieved differently across many segments and sub-segments. The key to understanding price points fundamentally lies at understanding what is valued and what is not.

It is my conviction that the traditional PC is not longer valued the same way that smartphones and tablets are in todays market. In fact I would argue that the true consumer market never really valued the PC in the first place. They valued the Internet the PC form factor brought them.

I say this because of the many observational studies we did in the 2003-2005 time frame where focused on consumer sentiment around desktops and notebooks–all Windows based. In these studies and rounds of consumer interviews several themes kept emerging.

The first was that most consumers did not feel knowledgeable about how to use their PC. It was clear there was a huge computer literacy gap between the early adopters and majority. Because of this many did not use very many applications on their PC regularly. Common tasks were browsing web, email, light gaming, word processing, instant messaging, etc. Light computing tasks were being done by heavy computing hardware. This is why I continually make the claim that in my opinion the traditional PC vastly over serves the mass markets needs with computing devices.

The other theme that seemed to emerge during our studies was that the PC had a very much love/hate relationship with many consumers. We heard many times about extremely frustrating experiences with technical problems or other issues that stood in the way of a delightful experience with PCs. I can’t tell you how many times I heard the phrase “sometimes I want to throw my PC out the window.” Think of the scene from Office Space and the copier, which they hated and later destroyed. This was a common theme I picked up discussing computing with the mass market.

There were experiences which were valued by the mass market in which the PC brought them. Things like email, the web, new ways of communicating, learning, etc. But the problem for the PC is the majority of experiences which are valued by the mass market are not unique to the desktop or notebook form factor. In fact some are vastly better on other devices.

The Appliance Mentality

All of this adds up to what I am calling an appliance like role for PCs. Appliances play important roles in the lives of consumer but not all of them play every day roles or even central roles. They have a specific set of uses and are used only when needed. Similarly the PC in the form of a desktop or notebook will likely be in a majority of homes. However, it will play a role and only be used as necessary. For this reason consumers will hold on to them longer, something they are doing arleady. But also will buy them more with a budget mindset not paying premium prices. This is why the coming low-cost revolution we see happening with PC prices fits right in line with this trend.

Of course the PC will always have value to some key markets but not the majority. This is why I think the “PCs are trucks” line of thinking is apt. Trucks are valued to some but not all. Those who know they need a truck for work or something else, know it and are willing to pay for it. This is where the premium price category will stay strong for many vendors.

Upgrade cycles are the culprit. Consumers don’t feel a need to upgrade, or its simply inconvenient or too difficult to move their data or programs. Whatever their reason it is clear that the desktop and notebook are pshchologically more like an appliance in nature. This means upgrade cycles are simply going to be longer in the 4-5 year range.

The bottom line is the PC simply has a longer shelf life. This is the new normal.