It seems as if the Windows 8 bump is really more of a speed bump.
Industry tracker IDC is now forecasting that worldwide PC shipments will fall in 2013, and that's bad news for Microsoft (NASDAQ:MSFT). Windows 8 was supposed to save the day, but demand sputtered during the holiday quarter, and there doesn't seem to be a reason to expect that trend to change in the near future.
After seeing desktop and portable PC shipments decline 3.7% last year, IDC sees another 1.3% slide through 2013. Don't make the mistake of branding IDC a pessimist. IDC and rival Gartner were actually projecting PC shipments to grow in 2012 a year earlier.
If anything, IDC is being too kind. It feels the one thing holding back the industry is the lack of touch-screen components that show off Windows 8's touch-centric features.
For whatever reason, IDC isn't ready to concede that PCs will continue to shrink in popularity. The researchers even partly dismiss the threat of mobile gadgetry that seems to be gaining ground at the expense of Windows-fueled systems: "We still don't see tablets (with limited local storage, file system, lesser focus on traditional productivity, etc.) as functional competitors to PCs -- but they are winning consumer dollars with mobility and consumer appeal nevertheless."
Really? It's more than that, so let me boil this down in kitchen terms.
The PC is the stovetop oven. It's functional. It's there for heavy cooking. It isn't very portable, but it gets the job done. Tablets and smartphones are microwave ovens. They're limited in what they can do, but they're fast, portable, and fun.
Yes, microwaves can be fun.
Until the microwave oven came around, everyone longed for a traditional stove. However, now that cheap and powerful microwaves are plentiful, you don't always need a stove. If you're a college student merely heating up ramen noodles and bagged popcorn, why do you want a full-blown oven? This is the real problem in the PC industry. Too many consumers overbought when they grabbed a PC. They didn't need the sheer processing power, but they didn't have a choice beyond stuffing a V-8 engine in a subcompact.
Imagine if the first beds to hit the market were vibrating beds. Imagine if the first cuts of meat available were Kobe.
You may be on a PC or laptop right now, but do you really need it?
Microsoft has feasted for years on selling the notion that you need a PC. Unfortunately for Dell (NASDAQ:DELL.DL) and Hewlett-Packard (NYSE:HPQ), they believed it too. They were too late to realize that smartphones and tablets were the future, and when they did commit they were too close to Microsoft to get it right.
Dell and HP were tech tastemakers, and now they're waffling about in the teens.
Apple (NASDAQ:AAPL) never saw it that way. Sure, Apple's hitting fresh 52-week lows these days on fears that its margins will be squeezed in the future given the popularity of the open-source Android operating system, but shrinking margins is better than shrinking margins and revenue. Apple's also eyeing India, and who can forget the massive opportunity China represents?
Windows will never go away, just as the stovetop oven will linger. Just don't expect to treat Microsoft, Dell, or HP as growth stocks again.