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Time to Adjust PC Merchandising

Retailers should push more popular devices as PC sales shrink

June 26, 2013 By Jeff O'Heir

If PCs - desktops and notebooks - are still taking up precious space on your sales floor, it might be time to replace them with more popular computing devices.

First-quarter PC shipments in the U.S. sank about 11 percent (roughly 14 million shipping worldwide), representing the biggest drop in 20 years, according to several research firms.  Sales are expected to remain flat or drop slightly this year and won't improve in the future, as consumers continue to adopt tablets and, to some extent, ultrabooks, hybrids and touch-screen notebooks, CEA analysts Shawn DuBravac and Jack Cutts noted in their presentation, "Tablets vs. PC Update", as part of the CEA Research Summit at CE Week in New York City.

PCs won't completely disappear since people primarily use their tablets to consume content, not create it. But you can expect the desktop market to continue to shrink as lighter and thinner notebooks hit the shelves.

Whatever their fate, desktops and notebooks certainly aren't high-turn products, with the majority of consumers replacing their desktops every 4.5 years and notebooks about every 3.5 years. Most consumers plan to replace their tablets about every 20 months. 

That rate will most likely slow down as the tablet market matures, but tablet sales will increase as lower-priced devices are introduced (Cutts expects decent $99 tablets to hit the streets around during the holiday sales season) and more household members adopt them.

About 76 percent of U.S. adults currently own a notebook, 70 percent own a desktop and 40 percent own a tablet. About 85 percent of adults surveyed this year expect to buy a new laptop sometime within the next few years, 72 percent expect to buy a tablet and 68 percent expect to buy a desktop. Those numbers point to relatively healthy short-term sales, but the analysts agreed that there won't be many manor improvements in any of those categories.

Jonathan Yarmis, an independent industry analyst, took a more extreme view during one of the summit's other panels, "The Great Debate: Can the PC Market Survive?"

"The existence of the PC is going away," he said. "I don't see what would cause PC shipments to pick up."

But Steve Baker, vice president of industry analysis for the NPD Group, gave a more optimistic view.

"PC sales aren't going down by double digits," he said, adding that the 3 to 5 percent decline in PC sales expected this year is less than last year. "Are PCs going away, absolutely not. We see no evidence that people are using tablets to create content. PCs and tablets are not competing devices; they are both computing device" used for different needs.

 

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