Dell has been embroiled in a legal battle with web host Advanced Internet technologies for the past three years, with the latter accusing the PC maker of deliberately shipping faulty OptiPlex desktops. AIT claims to have lost business worth several million dollars as a result of the 2,000 defective OptiPlex PCs it bought from Dell. Although Dell denies any wrongdoing on its part, court documents that were recently made public for the first time in three years show that employees were aware of the defects but chose to keep them from clients.
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.”
Nope, the PC still isn't dead. But don't just take our word for it, market research firm IDC, which spends its time tracking these sort of things, indicated that the PC market grew by 22.4 percent in the second quarter of 2010 despite lingering concerns over the economy.
"The PC market remains robust, and in a recovery phase, despite challenges to a broader economic recovery, such as slow job growth and a more conservative outlook in Europe and Asia Pacific," said Jay Chou, research analyst with IDC's Worldwide Quarterly PC Tracker. "The factors which led to the recent PC rebound, an aging commercial installed base, a proliferation of low-cost media-centric PCs, and low PC penetration through much of the world, remain key drivers going forward."
Nobody's benefiting more from this than Asus, who noted an 83.6 percent year-over-year growth rate, nearly double that of Lenovo, which had the second highest growth rate at 47.3 percent.
It wasn't a monumental leap, but global semiconductor sales went up 4.5 percent from April to May, settling in at $24.7 billion, says the Semiconductor Industry Association (SIA). The rise in sales was helped by steady demand for PCs, mobile phones, IT upgrades, industrial applications, and even automobiles.
"Growing concerns about issues such as government debt, declining consumer confidence, and pressures on government spending do not appear to have affected worldwide semiconductor sales to date," SIA President George Scalise said.
Peering into its crystal ball, SIA predicts PCs to grow by 20 percent this year, though it's unclear if the emerging tablet market falls into this category. Likewise, SIA said mobile phones will grow somewhere between 10 and 12 percent this year.
A few days ago, Microsoft revealed that it had sold 150 million Windows 7 licenses since the OS first hit the market, making it the fastest selling operating system in history with a 7-copies-per-second sales rate. Going a little further back in time, Steve Jobs suggested at the D8 conference that the PC's days as the most dominant force in computing might be numbered. He even likened PCs to trucks: “PCs are going to be like trucks. They're still going to be around, they're still going to have a lot of value, but they're going to be used by one out of X people.”
While Jobs' prognostication was rebuffed at the very same event by Microsoft CEO Steve Ballmer, the debate is likely to persist deep into the future. Now, Microsoft is again blowing its own vuvuzela.
Frank X. Shaw, Microsoft' corporate vice president of Corporate Communications, was full of big numbers in a recent blog post avowedly inspired by “the Windows 7 milestone.”Although the blog post highlighted Microsoft's success across a wide array of businesses by citing relevant statistics, it was also meant to remind ambitious rivals like Apple that Microsoft is not, after all, going to hell in a “Truck.”
Shaw pointed out that while Apple is expected to sell 7 million units of its “groundbreaking” tablet this year, PC sales are expected to top 350 million units. He even reminded Apple that it still trails Nokia and RIM in the global smartphone market. Shaw was so determined to target Apple that he conveniently overlooked the fact that Microsoft remains a fringe player in the smartphone market - someone clinging onto dear life by the skin of its teeth.
The initial buzz surrounding Chrome OS became a bit watered down the moment Google bared its cloud- and Linux-based operating system to peering eyes at a special event last November. Skeptics have been wondering whether the world is prepared for a cloud-based operating system. Leave aside the question of humanity's preparedness, doubts have also been cast on the product itself, with some doubters even writing it off as being little more than a glorified web browser.
But PC vendors can not ignore Chrome no matter what the skeptics have to say, for a bad bet might be better than no bet at all. According to a Reuters report, quoting a top Dell executive, the PC vendor is not going to be a mere spectator when Chrome OS debuts in the “late fall.” Amit Midha, Dell's president for Greater China and South Asia, has revealed that his company is currently discussing shipping Chrome OS netbooks with Google. Midha told Reuters that Dell wants to be at the vanguard of innovation.
Dr. Aric Sigman, a psychologist and author living in the UK, argued his case at a conference of childcare specialists that children under the age of nine should not be allowed to use a computer. It's not that they'll muck things up, but the other way around - computers are wreaking havoc on their brains, Dr. Sigman says.
"There is evidence to show that introducing information and communication technology (ICT) in the early years actually subverts the very skills that government ministers said they want children to develop, such as the ability to pay attention for sustained periods," Dr Sigman said.
"The big problems we are seeing now with children who do not read, or who find it difficult to pay attention to the teacher, or to communicate, are down to attention damage that we are finding in all age groups."
We think he might have said more, but quite frankly, we had a tough time paying attention. Must have been all that Oregon Trail from back in grade school.
Around this time last month, Valve officially opened up its Steam platform to the Mac community, and in doing so helped chip away at the argument that Macs suck for gaming. What they also did was reveal some interesting statistics about the machines their users are running.
As Steampowered forum member and Mac user "90rmbrown" points out, "facts are facts," and according to the latest Steam Hardware Survey, the average Steam gamer running an Apple computer has a beefier system than those running a Windows-based PC, at least in some areas. Mac users, for example, have more RAM (4GB vs 2GB) on average, while half of those running a Mac have an Internet connection of 2Mbps or higher, compared to 28 percent of PC users. Mac users are also more likely to have a dual-core processor running at 2.3GHz to 2.69GHz, or higher.
Before you whip out the pitchforks and light the torches, there are some things to note here. The sample size of Mac users is significantly smaller than that of PC users, so the hardware breakdown is dubious at best. And where it really counts for gaming -- in the graphics department -- PC gamers have more video RAM, and probably beefier videocards as well.
So what can we take from all this? As Sean Portnoy at ZDNet writes, PC gamers are still getting by with older hardware, while the early influx of Mac users with refreshed hardware could benefit from better graphics. Other than that, there isn't a whole lot to say -- we'll still take a PC over a Mac any day, especially when it comes to gaming.
What hardware are you running? Hit the jump and post your specs.
Steve Jobs can say what he wants about tablets replacing PCs in the same manner that urban automobiles have replaced farm trucks in the past few decades (his comparison, not ours), the fact of the matter is the PC market is doing just fine, according to market research firm iSuppli. More than just fine, first quarter PC shipments skyrocketed by nearly 23 percent over the same period from last year, representing the highest annual surge iSuppli has ever recorded since it began keeping tabs on the market in 2003.
"Early 2009 represented one of the weakest periods in the history of the PC market, as consumer and corporate demand plunged due to the economic downturn," Matthew Wilkins, principal analyst for compute platforms at iSuppli, said in a statement. "With economic conditions improving, PC sales rebounded in early 2010."
PC makers shipped some 81.5 million units during the first quarter, driven in large part by high demand in Asian markets, iSuppli said. During the same period in 2009, shipments sank to just 66.5 million units.
While Hewlett Packard (HP) remains the market leader with a 19.6 percent share, Asus by far benefited the most from the increased demand, noting a whopping 136.2 percent year-over-year growth rate. The next closest was Lenovo, which noted a 58.5 percent growth rate, followed by Acer with 47.1 percent.
Apple may boast a greater market cap than its sworn enemy now, but not a lot has actually changed: Microsoft still is the top dog in the world computer market and the Mac seems comfortably entrenched in the perennial-runner-up-to-the-PC role.
Apple's vastly improved market capitalization and the investor confidence it reflects can be attributed to its dominance in the PMP and phone segments. What started out as a MP3 player has blossomed into a device and software ecosystem that currently spans three segments and knows no parallel.
Steve Jobs avowedly learnt a valuable lesson in 1997: “We have to let go of a few notions here. We have to let go of the notion that for Apple to win, Microsoft needs to lose.” Those words appear to have acquired a prophetic aura.