PC sales are down. PC manufacturers are losing money. The PC world is coming to an end. Or is it?
The PC, the Personal Computer, was declared dead many times. The total money spent today on PCs is less than last year. The total number sold in retail is down. The total number of servers sold through the old sales channels is down. Surely the PC must be dead.
Hmm, the total capacity sold is up and is increasing at a rapid rate. The decline in sales is not due to a decline in use.
The total number of dollars spent is down because now we buy direct from China instead of buying a Chinese made computer from an American company. This change leads to lower prices and this type of market change happened several times before. On each occasion a delay in the supply chain, and an expensive overhead, was eliminated. The price went down. The sales went up. On some occasions the sales went up faster than the price went down, leading to an overall increase in sales. Today is one of the periods when prices are going down faster than sales are going up, leading to the doom and gloom forecast that the PC is dead.
The total number of computers sold in retail is down because the PC is packaged as a games machine then sold in a different market category. The small games machine PCs, the Xboxes and similar, replace the second PC used for games. When the Xbox style games machine first hit, PC sales increased because people with desktops were also buying notebooks. The Xbox was adding the third computer to the mix, not the second.
The Xbox and equivalent became the quick easy way to play DVDs and to place Internet telephone calls. The number of hours used on the PC decreased but not the number of PCs.
The PC became the server.
You used to buy a PC for your desk and a server for you work, you central storage, and your Web site. A basic new PC, not a cheap Dell or any other shortcut PC, just a basic PC with the standard Intel reference chips and good quality components, is faster than the expensive server you purchased a few years ago and are trying to maintain because it was so expensive at the time.
Several companies have reduced server sales because their market is using standard PCs. Linux is helping people recycle PCs as servers. Server sales to small offices is spiralling downwards as a result.
Servers for the Web
Sales of rack mounted servers for Web usage are up, not down, because of the move to the Web. The Googles and Youtubes of the world are spending billions of dollars each year on computers to store everything. The reason formal computer sales are down is simple, the big buyers buy shiploads of machines straight off the ships from China and few are recorded as conventional sales. When the traditional suppliers try to compete, they have to discount so far down that their total sales, in terms of dollars, is down. The total number of dollars is meaningless until all the big brands clear their backlog of stock.
Some companies are buying racks prepopulated with servers. Racks use PCs in flat boxes similar to pizza boxes. A high rise rack is 45 servers, 45 servers sold as one server. The count of boxes sold is almost irrelevant.
Video to the rescue
PCs have one advantage over everything else in the competition, they can store a massive amount of data. While smart phones are selling 32 GigaBytes as an upgrade from your ancient 16 GB smart phone, PCs can have 36000 GB without sweating the workload. Yes, more than a thousand times more data. Given that good quality video uses a GB per minute, that expensive new smart phone is lucky to store 30 minutes of quality video while a basic PC can store 600 hours at the same quality.
Currently everyone depends on Youtube to store their videos for free. Google owns Youtube and lets you use Youtube for almost nothing because Google is trying to destroy Facebook before Facebook offers video. Facebook is losing money on everything they try. Facebook will die or introduce massive usage charges. Google can then rip money off Youtube users.
When people are eventually charged full price for video storage and processing, video storage will move back to the PC. Editing has never left it because video editing on an iThing sucks.
Every few years the PC jumps from one to two cores then two to four then four to eight. In the past the jumps made things faster and we could sit at the PC for fewer hours, leading to the need for less PCs in the average household. Now the speed of the hardware exceeds the speed of human interaction by many times. Future speed increases will have very little effect on the number of hours we sit at a PC.
Kindling a new wave
Japan launched smartphones as a way of reading book many years ago. Amazon copied the trend with their Kindle. Samsung and Apple and Sony tried to compete but the Kindle won because the Kindle is so much easier to read on the train to work. The Kindle style reader is replacing printed books, not the PC.
None of the smart phones replaced the PC. Some people buy tablets and pads then call the device a replacement for a PC but they still own a PC. Some people add
cloud storage as a way of getting away from the PC but the cloud storage is just an outsourced PC. When people read their telephone bill and see the data transfer charges, some shift back to their PCs.
You can now buy a PC with a television bolted to the front. It is sold as a television with a PC bolted on the back. Because of the marketing, it is counted as a television, not a PC. The package contains all the PC parts including a network connection. It is effectively the circuit board of a notebook computer in the back of the television. There are enough USB ports to add the keyboard and mouse.
The proof that they are PCs is the ability to load Linux into the internal flash memory. Many of the televisions have non standard chips and the Linux developers might require a year or two to develop for all the different smart televisions, but it will happen. The television manufacturers are dominated by Samsung and similar companies with strong computer sales. those companies will bring everything from their computer divisions into their smart televisions.
The hidden PC
PCs are everywhere. That tiny little box in the corner acting as a network filter is the electronics of a PC running Linux or a BSD Unix. The hard disk is replaced by flash memory for long term storage and RAM for short term storage. If you could plug in a keyboard, you could use it as a computer.
Hidden PCs are in Internet telephone controllers, network filters, network storage devices, printers, routers, security systems, air conditioners, and smart refrigerators. If a device offers firmware upgrades, the chances are high that it is a hidden PC.
Hidden PCs did more to slow down PC sales than any other device and they hit at a time of massive PC growth, hiding the impact of hidden PCs. The last time I found believable numbers of sales, based in the actual chip counts, hidden PCs were running at more than ten times the number of PCs. Their sales still exceed all the brands of smart phones put together.
The Headless PC
headless PC is a PC without a screen or keyboard. All the keyboard input and screen output is relayed through th network and other computers. Headless computers have so much power that they often run a Web server as the user interface. When you access that tiny little box in the corner acting as a network filter, you use a web interface to access the headless PC running the network filtering software.
Headless PCs may, or may not, be suitable for full PC usage. Most of them use a cut down Linux and do not have enough storage to handle a general purpose version of Linux. id there is a USB port where you can plug in a disk or a large USB memory stick, you can boot from Linux and use the box as a PC.
Many of the little boxes have cut down network chips, and similar problems, preventing their use as a PC. They do not have the power to be useful for more than their current function. The thing is they are replacing part of the function of a PC with a
lite version of a PC. If you use enough of those smart little devices in the average medium size office, you can replace the equivalent of a PC and reduce your total PC count by one.
A few months later you need one of those little boxes to be bigger or faster and are back to using a PC for the task. The fashion is currently to replace PCs with smart boxes, called appliances, for data storage and several other tasks. Data storage has already swung back to the PC because those smart little boxes cost twice as much as a PC, based on storage size, and are extremely hard to expand beyond their initial limited size.
the speed limit of old PCs is gone. Measure any decent PC. The PC can be idle at a few percent of use while waiting on disks and the network. you cannot increase the speed of the network but, on a PC, you can upgrade the disks to something faster.
None of the non PC devices let you upgrade. You have to wait to next year then throw your current model in the trash bin and buy the new model.
The PC is effectively infinitely expandable because you can upgrade at any time and new expansion options appear all the time.
The PC market is expanding, based on capacity and usage, but prices are currently falling faster than the reported expansion, giving the impression the market is declining. Many of the PC sales are classified as something else because the PC is in a different case, or from a different supplier, further reducing reported PC sales. The post PC era will not happen this year and will have to wait until people stop using video.