Are PCs dead? Certainly not, as demand for upgraded systems is set to explode

IT managers - and consumers - will demand machines with better displays, longer battery life and the power to drive tablets to their knees

The rumours of the PC's demise have been greatly exaggerated, analysts say.

For several years, some industry experts have been predicting the death of the PC.

Now, a day after Gartner predicted the start of renewed growth of the worldwide PC market, some analysts say they agree that talk of the PC's demise is wrong, as corporations -- and consumers -- are ready to upgrade aging machines.

"We need PCs," said Dan Olds, an analyst at Gabriel Consulting Group. "Those people who cried about the death of the PC probably also called for the death of the mainframe. They're just wrong."

Gartner Monday issued a report projecting that PC shipments could reach about 317 million in 2015, up from 308 million units expected to ship this year. Gartner's report projects that 2014 PC shipments will drop by 2.9% compared to last year, an improvement over recent years.

In the report, Gartner analyst Ranjit Atwal estimated that about 60 million PCs will be upgraded to new machines this year. The "revival" of the PC business will be driven by upgrades of Windows XP-systems that have been used by office workers and consumers for the last several years, he said.

In July 2012, a Gartner report blamed consistently flat PC sales on the growth of tablet and smartphone devices.

Zeus Kerravala, an analyst with ZK Research, said at the time he expected tablets and smartphones to continue to punish the PC industry. "This is a generational change," he said in a 2012 interview. "This isn't a temporary phenomenon. PCs are great for information creation, where tablets and smartphones are better for information consumption and we're mainly consumers, not creators."

It seems, though, that people are either getting back to 'creating information' or are tired of creating on aging PCs.

"PCs never died, but some people opted to buy a tablet rather than replace their aging PC," said Patrick Moorhead, an analyst with Moor Insights & Strategy. "At some point, though, their PC gets too old and needs to be replaced. That's what's happening now."

Charles King, an analyst with Pund-IT, Inc., noted that the the latest Gartner study is likely to quiet the sonorous chants that 'the PC era is over.'

"One underlying narrative in Gartner's report -- and IDC's similar forecast -- is that enterprises are finally getting off the dime and upgrading doddering desktops and laptops," said King. "Given the currently available hardware options, aggressive pricing by vendors and improvements Microsoft has made to Windows 8.1, there hasn't been a better time to upgrade. Businesses seem to fully understand that."

That doesn't mean that the popularity of tablets and smartphones is ebbing. Far from it.

We're simply going to be multi-computational. People will use laptops - and, shudder, even desktops - to work on spreadsheets, edit video, share collaborative work documents and device the company's financial or marketing plans.

Tablets and smartphones will be used more by people on the run -- to send and read emails in airport lounges and cafes, to watch movies on road trips and to play games while flying to a business meeting.

PCs were never out of the game. Sure, we put off buying new ones so we could spend the money on new tablets and smartphones. Now, though, it's time to replace the old PCs and fire up new, powerful machines that can help us get more work done faster.

"Substantial growth is good news for the industry, and for component makers like Intel, but how well the PC makers profit individually is still up in the air," said King. "Some have done pretty well, while others have driven unit sales by cutting prices, and profits, to the bone. But for the group, Gartner's forecast has to be a cause for relief among both PC vendors and their shareholders."

It doesn't mean, though, it's going to be business as usual for the major PC makers like Lenovo, Hewlett-Packard and Dell.

Consumers and enterprise buyers want a better PC. They want a PC with a longer battery life and more power. And yes, they also want a better-looking, cooler machine.

And they want it now.

"There will still be a large market for PCs," said Olds. "However, it's a mature market. We're well past the point when enterprises and individuals were buying their first or second PCs. Vendors can still make a living on PCs, but it's not going to get any easier. They'll be competing tooth and nail for sales, and need to keep their offerings fresh and costs down -- not an easy task."

"PC vendors will have to ensure that their systems can deliver the performance that users need, at a reasonable cost," said Olds. "For example, laptops need to have great high-resolution displays and enough performance to handle workloads that would take a tablet to its knees. They also have to deliver solid battery life, so that users can remain untethered for a significant amount of time. PCs don't have to hit the same price points as tablets to be competitive but they have to earn that extra dough."

Moorhead also noted that PC makers are taking some of the best attributes from tablets and smartphones and bringing them to the PC platform.

"Intel has done a lot to make that happen," he said. "They've invested billions into touch screens, miniaturization and lower-power, higher-performance chips."

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her email address is sgaudin@computerworld.com.

See more by Sharon Gaudin on Computerworld.com.

Read more about pcs in Computerworld's PCs Topic Center.

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