PC sales dropped 4.9% in the fourth quarter compared to a year ago, and sluggish Windows 8 sales did nothing to help. So says a new report by Gartner, which also cites the "lackluster form factor" of Windows 8 devices as another problem. Even worse, the report concludes: The days of PC dominance are done.
The Gartner report says that PC shipments in the fourth quarter were 90.3 million units, 4.9% fewer than the fourth quarter of 2011. That's only a small part of the bad news, though. Gartner added that the world's weak economy is playing a relatively minor role in the decline. The bigger problem is that people are shifting their computer buying habits permanently. Tablets will be people's main computing devices, and they will share a single PC among several people in a household. Here's what Mikako Kitagawa, principal analyst at Gartner has to say:
"Tablets have dramatically changed the device landscape for PCs, not so much by 'cannibalizing' PC sales, but by causing PC users to shift consumption to tablets rather than replacing older PCs. Whereas as once we imagined a world in which individual users would have both a PC and a tablet as personal devices, we increasingly suspect that most individuals will shift consumption activity to a personal tablet, and perform creative and administrative tasks on a shared PC...Buyers will not replace secondary PCs in the household, instead allowing them to age out and shifting consumption to a tablet."
As for the hope that Windows 8 would somehow revitalize PC sales, the report concludes that simply didn't happen. And the report added a dig at PC makers, saying that their Windows 8 devices are "lackluster." Here's what the report says:
"The launch of Microsoft's Windows 8 did not have a significant impact on PC shipments in the fourth quarter. Analysts said some PC vendors offered somewhat lackluster form factors in their Windows 8 offerings and missed the excitement of touch."
Gartner isn't alone in saying that tablets are taking over the central role in computing. A report by DisplaySearch claims that in 2013 tablets will outsell notebooks by a wide margin -- more than 240 million tablets versus 207 million notebooks.
And there's plenty of evidence that Windows 8 sales are bleak. Net Applications found that in December only 1.7 percent of desktops, notebooks, and laptops using the Web used Windows 8. Compare that to Windows 7 at the same time in its usage cycle: InfoWorld's Woody Leonhard notes that at the same time in Windows 7's life cycle, it had a 21 percent market share.
In a tablet-driven world, Microsoft is in trouble. Microsoft botched its tablet strategy with Windows 8. It forces traditional PCs to use a tablet-focused interface, which will only depress traditional PC sales. And it has two different tablet interfaces that look the same but aren't -- Windows RT and Windows 8. Sales of Microsoft's Windows RT tablet, the Surface, have been sluggish at best. The brokerage firm Detwiler Fenton says Microsoft will sell only 500,000 to 600,000 of them in the December quarter, compared to Microsoft's expectations of one million to two million. And one of Microsoft's key partners, Samsung, has said it won't release a Windows RT tablet in the U.S. because there isn't enough demand for it.
Mike Abary, Samsung senior vice president in charge of the PC and tablet businesses, told CNet that RT confuses consumers, and requires an expensive marketing campaign to help consumers understand the difference between RT and Windows 8. Because of that, and little demand, Samsung won't release Windows RT devices in the U.S.:
"There wasn't really a very clear positioning of what Windows RT meant in the marketplace, what it stood for relative to Windows 8, that was being done in an effective manner to the consumer. When we did some tests and studies on how we could go to market with a Windows RT device, we determined there was a lot of heavy lifting we still needed to do to educate the customer on what Windows RT was. And that heavy lifting was going to require pretty heavy investment. When we added those two things up, the investments necessary to educate the consumer on the difference between RT and Windows 8, plus the modest feedback that we got regarding how successful could this be at retail from our retail partners, we decided maybe we ought to wait."
What does all this mean? In a world of declining PC sales and increasing tablet sales, Microsoft's success is bound to PCs, not tablets, which is certainly bad news. It still hasn't found a way to crack the tablet market.