In the last few weeks, there has been a lot of discussion about the PC market. I have maintained the market is still contracting and consolidating. Only a handful of hardware vendors will continue to own share of this contracting market and most of the positive gains by vendors will come from stealing customers from their competition. The PC category is one I keep a close eye on and one my firm gathers a lot of research on. We believe the PC, in the shape of a notebook or a desktop, remains an important hardware product for long form workflows and productivity tasks but we recognize not every human on the planet has a use for these machines.
Several things have changed in corporate and consumer PC environments. In corporate, more choice has entered the work place. You now have significantly more options to pick from with form factors, features, and brands of PC you want to use in your work place. IT departments have started offering a more robust menu of PCs to employees, and this is a positive shift from the way IT used to deploy corporate PCs. In the consumer space, we are seeing both longer refresh cycles overall (the average consumer PC lifecycle is 6.5 years) and consumers beginning to spend more on their PCs because they know they are keeping them for a long time — they view them as long term investments. From consumers, who are also heavy users of PCs in the workplace, we are also seeing a more work/home divide where the corporate-issued PC is just used for work and the individual is choosing other devices to use for personal computing tasks.
I want to share two charts from our consumer facing study. We focused this particular study on more common consumer use cases than looking at the consumer in the enterprise, a different study altogether.
In our research at Creative Strategies, we add a lot of questions to our studies that are driven by our qualitative work to truly understand the mindset of the consumer. We do this by adding questions around sentiment, or overall phrases they agree with, to help us quantitatively see some mindset and behavior patterns. This helps us understand more why things happen in the market and yield deeper insights for our analysis. I’m sharing here one question of several designed to understand the consumer mindset for the PC category.
While this is one picture from our overall study, it does bring out a few important things. The biggest takeaway is consumers aren’t saying they don’t see a need for a PC at all, just they don’t see a need for a new one. As you can see, only 3% said they question their need for a PC. Yet, over 50% simply don’t see a need for a new one. This is always the hardest thing any hardware company is up against with consumers because they are overwhelmingly content most often. Innovation’s goal is to shake the crust of contentment off of consumers. As hardware products reach maturity, this becomes much harder to accomplish. There are some other fascinating data points here, and I’ll let you chime in with your own interpretations.
Perhaps this next chart highlights why consumers are so content. This shows the most common tasks consumer do each day with their PC. As you can see, in many cases, none are computationally complex or taxing to a modern day PC which has been good enough at many of these tasks for years.
Note some of these responses are from consumers who use a PC at work so the responses are from a mix of consumers who use a PC daily for work and those who do not. Regardless, it is interesting to look at most common daily usages as a barometer to understand what people do with their devices.
One other thing that bounces around in my head from this last chart is how many of these tasks can be done on something other than a PC. I think about this from the viewpoint of, if consumers wise up to other form factors which may suit their needs better, will their device behavior change? We see some of that already when we explore a consumer’s awareness of things they do more with their smartphone than their PC or main tasks the smartphone has taken from the PC. But the fact remains, the larger screen computing device is still relevant, but its role has changed.
Consumers will upgrade when their machine feels old and slow. For those of us trying to size that up, we simply have to use our models around age of PC in the market and the estimated number of devices in the market which may fit a “need to upgrade this year” profile. I wish the picture was rosier across the board, but consumers tend to be simplistic. We often forget that.