iPad

For PCs, a new lease on life.

Phillip Nones Business, Manufacturing, Sales , , , , , , , , ,

There are some interesting results being reported so far this year in the world of “screens.” While smartphones and tablets have seen lackluster growth — even a plateauing or a decline of sales — PCs have charted their strongest growth in years.

As veteran technology reporter Dan Gallagher notes in a story published recently in The Wall Street Journal, “PCs have turned out to be a surprising bright spot in tech’s universe of late.”

In fact, Microsoft and Intel Corporation have been the brightest stars among the large-cap tech firms so far this year. Intel’s PC chip division’s sales are up ~16% year-over-year and now exceed $10 billion.

The division of Microsoft that includes licensing from its Windows® operating system plus sales of computer devices reports revenues up ~15% as well, nearing $11 billion.

The robust performance of PCs is a turnaround from the past five years or so. PC sales actually declined after 2011, which was the year when PC unit sales had achieved their highest-ever figure (~367 million).  Even now, PC unit sales are down by roughly 30% from that peak figure.

But after experiencing notable growth at the expense of PCs, tablet devices such as Apple’s iPad and various Android products have proven to be unreservedly solid replacements for PCs only at the bottom end of the scale — for people who use them mainly for tasks like media consumption and managing e-mail.

For other users — including most of the corporate world that runs on Windows® — tablets and smartphones can’t replace a PC for numerous tasks.

But what’s also contributing to the return of robust PC sales are so-called “ultra-mobile” devices — thin, lightweight laptops that provide the convenience of tablets with all of the functionality of a PC.  Those top-of-the-line models are growing at double-digit rates and are expected to continue to outstrip rates of growth in other screen segments including smartphones, tablets, and conventional-design PCs.

On top of this, the continuing adoption of Windows 10 by companies who will soon be facing the end of extended support by Microsoft for the Windows 7 platform (happening in early 2020) promises to contribute to heightened PC sales in 2019 and 2020 as well.

All of this good news is being reflected in the share prices of Intel and Microsoft stock; those shares have gone up following their most recent earnings reports, whereas all of the other biggies in the information tech sector — including Alphabet, Amazon, Apple, Facebook, IBM, Netflix and Texas Instruments — are down.

It’s interesting how these things ebb and flow …

Grand Funk: PC Sales are in the Doldrums

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PC sales decline in 2012
Eyebrow-rasing stat: Worldwide PC shipments declined in 2012 … the first drop since 2001.

If people had any doubts about the inexorable rise of tablet devices and smartphones, the sales results for the holiday season would surey erase them.

In fact, for the first time in five years, holiday PC sales have actually declined. Tech industry tracking firm IDC reports that personal computer manufacturers sold just shy of 90 million units worldwide during the last quarter of 2012. That’s down more than 6% compared to PCs sold in the final quarter of 2011.

What makes the news doubly troubling for the PC segment is that, unlike in 2009 when sales of all tech devices were hammered by a worldwide recession, this time around sales of other devices such as tablets and smartphones have grown substantially.

And considering 2012 as a whole, the news is even worse. The estimated 352 million PCs sold were ~3% lower than in 2011, which makes this the first annual decline in more than a decade – since 2001 in fact, when the 9/11 attacks roiled markets and impacted sales of all goods across the board.

And it isn’t trouble for just one manufacturer, either: The 2012 sales drop hit all of the big players including Dell, HP and Lenovo.

What about the prognosis for 2013?

It’s not much better. IDC is forecasting mediocre growth in the PC segment (less than 3%) — although at least that isn’t a decline.

But on the downside, it’s very possible that tablets will actually outsell PCs in 2013 – a possibility that would have seemed unthinkable just one or two years ago.

We’re hearing a number of explanations for the slump in PC sales. One of those is that Microsoft’s new Windows 8 operating system isn’t doing much to excite buyers – at least not so far.  The surge in new PC hardware purchases, which commonly occurrs when newer versions of Windows have been introduced, hasn’t happen this time around.

More fundamental than the Windows 8 conversion rate are signs that PCs are losing their edge over other devices in the perception that they’re the most secure, reliable and efficient options.

This shift may be less about PCs themselves or their quality, and more about the aggressiveness by folks like Apple iPad and their incursions into the PC “space.”

A Surprise? College Students are Ambivalent about e-Books

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College textbooks
Surprisingly, college textbooks still reign supreme over their digital counterparts.
The digital revolution is having its first and greatest impact on the younger generations. Whether it’s mobile apps, hyper-texting, online gaming, or keeping up on the news without the benefit of the daily paper, they’re the ones most on the cutting edge.

So it might be somewhat surprising to read the results of a survey of college kids about how they prefer to access their textbook information. I’ve blogged before about the racket that is college textbook publishing – a rip-off if ever there was one. So one would think that college students (and their parents if they foot the bill) would be very keen on any advancements that begin to render expensive textbooks obsolete.

But according to a survey conducted in mid-2010 by OnCampus Research, a division of the National Association of College Stores, only 13% of college students had purchased an electronic book of any kind during the previous semester.

And of that percentage, ~56% revealed that the prime mover of their e-book purchase was because it was required course material for class, not because they chose an available e-version over a printed version of the textbook.

What’s more, nearly three-fourths of the students in this survey stated that they prefer printed textbooks over digital versions.

And when it comes to what devices people are using to view their e-books, most are accessing the contents on laptop computers rather than newer devices that have hit the streets in recent times:

 Prefer reading e-books on a laptop computer: ~77%
 Prefer reading on a desktop computer: ~30%
 Prefer reading on a smartphone: ~19%
 Prefer reading on a Kindle or similar e-reader device: ~19%
 Prefer reading on an iPad or similar device: ~4%

Laura Cozart, a manager at OnCampus Research, had this to say about the survey results: “The findings of the report are not surprising. Every new innovation takes time before the mainstream population embraces it.”

Reflecting the current situation, of the NACS member stores that offer digital content, e-books comprise only ~3% of course material sales. But NACS is expecting that percentage to rise to 10% or 15% by 2012.

But the impetus behind that anticipated increase is expected to come from faculty members as they get more familiar and comfortable with the interactive possibilities to enhance their classroom instruction — rather than from those oh-so 21st Century students.

It wouldn’t be the first time the “leading edge” meets the “back edge” going around the other side.

Microsoft’s “next of Kin”? None, evidently.

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Microsoft Kin logoPeople say that today’s digital world has dramatically shortened the business and product development cycle. But even so, the amount of time it took for Microsoft to pull its Kin social phone off the market – a mere six weeks after its launch – has to be a record, or close to one.

For those who missed this eye-blink of a product introduction, the Kin was supposed to be a major component in Microsoft’s efforts to become a player in the mobile market, in response to the success of Apple’s iPod and iPhone, as well as a variety of new smartphones that are powered by Google’s Android software.

The New York Times has reported that this latest development “is the latest sign of disarray for Microsoft’s recently reorganized consumer products unit.”

Amazingly, for a product that was in development for several years and reportedly represented a resource investment of well over $1 million, Microsoft sold only a relative handful of units during the Kin’s star-crossed six-week introduction. Reports of sales volume vary – from a few thousand units on the upper end to as few as 500 on the low end. Either way, it’s a stunning defeat for a company that up until a short time ago, seemed well on its way to being an important player in the field.

What was Kin’s problem? In a nutshell, consumers didn’t like the product nor the way it was being sold. Verizon, Microsoft’s service provider partner, priced Kin service agreements like a smartphone – at ~$70 per month when combined with the mandated voice plans. But many people felt that the platform was mediocre and didn’t possess anything near the functionality of a smartphone. “A feature phone, not a smartphone,” was the common complaint.

Some people are wondering if there’s a bigger story afoot: whether or not Microsoft is still committed to its Windows Phone 7 platform. It’s fallen so far behind iPhone and Android, what are its chances of success now?

And that’s not all the bad news for Microsoft on the consumer side of the business. Gizmodo is reporting that Microsoft has also cancelled a project to develop its Courier tablet computer that would have competed with the iPad.

This is just the latest in a string of Microsoft consumer initiatives that have basically fallen flat – Money, Encarta, and now the Kin and Courier.

Once, Microsoft would have hung in there for the long haul. It doesn’t seem so today.

Electronics Before Bed = Up All Night?

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It’s common knowledge that Americans are getting too little sleep on a daily basis. Studies have shown that the average hours of sleep have been declining pretty steadily in recent years. The National Sleep Foundation estimates that three out of four Americans are sleep deprived. Often, people scrimp on sleep each night of the week … then try to make it up on the weekends.

No wonder hospitals and other organizations are doing a land-office business in sleep studies. In fact, polysomnography is one of the biggest growth segments in the healthcare field.

Now, here comes along a new idea as to what might be contributing to our sleep-deprived state. It’s the cornucopia of consumer electronics we use – computers, laptops, smartphones and iPads – up until the moment we hit the sack.

With these devices shining brightly into our eyes, it turns out they’re tricking our bodies into thinking it’s still daytime.

According to sleep specialists, exposure to these electronic devices can disturb sleep patterns and contribute to insomnia. Phyllis Zee, a neuroscience expert and director of the Center for Sleep & Circadian Biology at Northwestern University, is one who contends that light emanating from an iPad or a laptop “can be sufficiently stimulating to the brain to make it more awake and delay your ability to sleep.”

The iPad, Apple’s latest sensation, comes in for special attention, as it’s a device many people like to use when reading before bed … at the very time the brain thinks the environment should be dark. Unlike the Kindle, the iPad’s light-emitting screen shines directly into the reader’s eye, making it more likely to disrupt sleep patterns.

Not surprisingly, people are affected differently. Elements like the brightness of the light and whether there is extensive blue light – which is common during the day but also emitted from computer screens – are seen to play a role. One way to counteract the “blue light effect” is to wear orange sunglasses which are purported to negate the effect of the blue light; although this might help, it probably won’t do anything for the wearer’s fashion sense!

An easier but equally effective approach might be to simply swear off the computer, iPad or smartphone in the last hour before bedtime. Chances are, your body will thank you in the morning.