PC OEMs under pressure to diversify

IT professionals are increasingly buying mobile computing devices, threatening commercial PC sales.

06/07/2012


For a long time now, it’s been a challenging environment for the PC industry. The tough global economic climate, particularly in Europe hasn’t helped. The iPad and other tablet PCs have proven successful in the consumer PC market. A similar situation is taking place in the commercial segment; IT professionals are increasingly buying mobile computing devices, threatening commercial PC sales. According to IMS Research’s, recently acquired by IHS Inc., World PC tracker in Q1 2012 the PC market observed a moderate growth; desktop PC shipments increased 2.2% and notebook PC shipments increased by 3.3%.

However, despite this recent news announcements suggest more tough times for PC OEMs and a change of direction.

Shares of Dell on May 23, 2012, plummeted 17.18% to $12.49, after the company reported its Q1 results. Dell said recently, “We’re committed to continuing our strategy to re-shape Dell’s business as an end-to-end IT provider.” Dell is strategically moving towards being a total enterprise service and solutions provider, no longer focusing on the consumer side. The consumer PC segment is much bigger than the commercial side, therefore this change hints at the fact that Dell may lose more market shares in the future.

Compared with Dell’s enterprise focus strategy, HP will still competes in both the commercial and consumer PC market, while seeking more profit at the same time.

On May 9, 2012, HP showcased its new line of computers in Shanghai at the 2012 Global Influencer Summit. This is the first time HP held this conference in China which indicates the Chinese market has become ever more important to HP. However, to win the Chinese market, HP needs to compete more heavily in the entry-level PC segment.

In addition, on May 18, 2012, HP announced that it would cut the jobs of approximately 27,000 employees (8.0% of its workforce), by the end of fiscal year 2014. Disappointingly, many of the job losses are expected to come from the Personal System Group which takes care of the PC business.

Another announcement from HP suggests that the HP ‘Compaq' branding will end next year. The ‘Compaq’ name will live on, but only for basic computing at entry-level pricing. This also indicates that HP’s strategy is to compete in the low-end PC market, but using its ‘Compaq’ brand.

For the Asian PC OEMs (Lenovo, Acer, Asus, etc.), strategies may continue to be volume driven. Cost is still one of their major advantages and they are good at competing on price. With this in mind, they are capturing more market share from emerging markets which are more price sensitive. As Dell gradually quits the consumer market and HP seeks more profitability, I expect Asian vendors to capture more market share.

The PC industry has already been commoditised and become a pure scale business and less innovation driven. That’s why PC vendors crazily compete on unit shipments to get more market share. However, while the volume growth has stopped , this market share game cannot continue and that’s why OEMs are looking for different strategies. Is the ultra-book the answer to their prayers?



No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
Each year, a panel of Control Engineering editors and industry expert judges select the System Integrator of the Year Award winners.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Learn how to create value with re-use; gain productivity with lean automation and connectivity, and optimize panel design and construction.
Go deep: Automation tackles offshore oil challenges; Ethernet advice; Wireless robotics; Product exclusives; Digital edition exclusives
Lost in the gray scale? How to get effective HMIs; Best practices: Integrate old and new wireless systems; Smart software, networks; Service provider certifications
Fixing PID: Part 2: Tweaking controller strategy; Machine safety networks; Salary survey and career advice; Smart I/O architecture; Product exclusives
The Ask Control Engineering blog covers all aspects of automation, including motors, drives, sensors, motion control, machine control, and embedded systems.
Look at the basics of industrial wireless technologies, wireless concepts, wireless standards, and wireless best practices with Daniel E. Capano of Diversified Technical Services Inc.
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
This is a blog from the trenches – written by engineers who are implementing and upgrading control systems every day across every industry.
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Control Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.