Demand for notebooks and enterprise desktops expected to pick up
Currently in the throes of an unrelenting downward spiral, the global PC market is desperately overdue for some good news, but turning the corner after eight straight quarters of global shipment decline is not going to be easy. Nevertheless, a number of key players in the PC market remain hopeful of encountering some solid demand in the second half of 2014.
Guild Wars 2 appears to be selling well. So well in fact the developer has voluntarily sold itself out of digital copies. This is the first time in recent memory that a developer has refused to take money from hordes of eager PC Gamers, and while the game does have some growing pains, we commend them preemptively for taking this bold step to protect the player experience. The developer broke the news to would be fans via their official Facebook page, and the comments below seem to suggest some users are having more problems than others.
Both IDC and Gartner have released their third-quarter PC shipment numbers. While their figures may be contrasting, they paint identical pictures of a quarter that saw underwhelming growth in PC shipments. According to IDC, global PC shipments grew 10.5 percent during the quarter, which is 3 percent less than its forecast. But according to Gartner, PC shipments only grew 7.6 percent during the quarter, ending up well below its estimate of 12.7 percent. Analysts blamed poor back-to-school demand for lower-than-expected results. They also feel that the tablet upsurge is bound to eat into the market for secondary PCs.
Many industry watchers think they have caught the foul whiff of a PC sales slump. Their increasingly negative market outlook is beginning to affect share prices of tech behemoths like AMD and Intel. Now, that negative outlook has elicited a very strong reaction from Microsoft. A slowdown, or mere talk of a slowdown, is the last thing the company needs at this stage. After all, Redmond has been waiting for the PC market to fully recover from a previous slump so it can make the most of Windows 7's phenomenal show.
Bill Koefoed, Microsoft's General Manager of Investor Relations, accused analysts of hastily jumping to conclusions during Oppenheimer’s Annual Technology, Media & Telecommunications Conference in Boston. “I don’t know that I would take two guys that go visit some ODM (original design manufacturer) in Taiwan as a reference on what the market looks like. I would gather a lot of information and then decide what you think that it looks like.”
He is not really alarmed by the constant “chatter” about the PC market slowing down: “You know, whether or not the market’s up or down one month or another, I don’t know, there tends to be, since I’ve had this job, there tends to be a lot of chatter.”
Another top Microsoft executive was also quick to downplay all such apprehensions while speaking at the Pacific Crest Leadership Forum on August 10. Robert Youngjohns, Microsoft SVP and president, North America Sales & Marketing, reminded everyone that besides PCs, “a substantial part of our business in North America is selling infrastructure software like Windows Server 2008, like SQL Server, like System Center, the stuff that runs the enterprise not just the PC.”
Dell’s plight in recent times is well documented: plunging demand, layoffs and factories closing down. For good measure, it has Acer breathing down its throat. Acer is currently the third largest PC manufacturer in the world, but its rise to the number two slot, currently occupied by Dell, is a mere formality now. Though Dell still doesn’t appear to have found a way to contain Acer, its CFO Brian Gladden believes the PC maker may soon be out of its sullen misery. He said that demand for Dell products, though still inconsistent, seems to have stabilized. He expects Dell’s earnings to be a bit better when it declares its second-quarter earnings in August.