PC sales will decline for the first time since 2001

A development that will bring bigger shifts in the computer industry at large

November 21, 2012

PC sales are expected to decline by 1.2% to 348,7 million units this year, the first time PC sales have declined since 2001 – a development that is going to have a profound impact on the computer market, said Christopher Riley, MD of leading notebook and accessories retailer, The Notebook Company.

“This is a statistic that we have all been expecting – so it isn’t really surprising. But it is going to have a profound impact on companies who are still reliant on PC sales – and there are still many of them. Those companies who have not yet being able to successfully diversify out of a PC-lead market into the growing software and services markets – and growing hardware markets that come from the sale of tablets, laptops and smartphones – will be in for a very tough ride.”

According to research company HIS iSuppli, the PC market will contract by 1.2% during 2012, dropping to a total sale of 348.7 million units.

While companies like HP are battling to regroup after unsuccessful acquisitions of software-focused companies such as Autonomy – which was purchased last year for $10.3 billion – other innovators, such as Apple and Google, are riding the new-age wave in the computer industry.

HP, which still banks on PCs for around a quarter of its revenue, recently had to announce an impairment charge of $8.8 billion after it was discovered that Autonomy – the second largest software manufacturer in the UK – was guilty of some creative accounting , and wasn’t such a stellar company after all.

This breaking news is having a serious impact on HP, with many analysts pondering just how it will emerge from its malaise.

HP has not been able to adapt to changing markets -and has not been able to come up with mobile and cloud computing solutions. Due to this sluggishness –and due to costly acquisitions – up to 29 000 employees now face the axe by the end of fiscal year 2014.

This is expected to save the company up to $3.5 billion.

Commenting further Riley said: “We have witnessed a massive swing towards the sale of tablet PCs and, while we are still essentially a laptop retailer, in essence the name ,‘The Notebook Company’, no longer accurately describes what we do. Who do more than just sell laptops.”

Riley said that before he founded The Notebook Company in 1998 he had been the founder of an earlier company, which focused on the sale of PCs. “Back then I could already see there would be a rapid shift to laptops – hence the decision to shut down my PC business and form The Notebook Company.”

While Riley might be pondering whether or not he needs to change the name of his company, larger companies like HP have far more on their plate.