Desktop PC sales down while Laptop sales up

Desktop PC's are a dieing breed...On a recent blog post on Gizmodo, I found an interesting article about how the computer industry is shifting from Desktops to Laptops. This shift is not a gradual shift, but a drastic shift.

By John Herman, Gizmodo

Desktop PCs have been in decline for a decade, and countless people have said their piece about it. But new evidence suggests the desktop tower’s death spiral is underway—and we’re not too broken up about it.

I say this as a guy who was baptized into the tech world with a desktop; who still obsessively follows the latest PC components from Intel, Nvidia, ATI and the like; who has built, fixed or upgraded more towers than I care to remember; and who, until a few years ago, was an avid PC gamer. As someone who would be, by most measures, a desktop-PC kinda guy, I just can’t go on pretending there’s a future for them.

The State of the Industry
This is more than a hunch; a grim future is borne out by the numbers. A week ago, iSuppli issued a broad report on the state of the PC industry. The leading claim was predictable: The PC industry was experiencing lower-than-expected quarterly sales—down about 8% from the same time last year. This included laptops, and made sense, because the whole economy’s gone to hell, right? People aren’t buying computers.
Except that’s not quite what’s happening. In the same period, laptop shipments—already higher than desktop shipments on the whole—grew 10% over last year. Desktops were entirely to blame, dropping by an astounding 23%. That’s not decline—it’s free fall. (laptop accessories grow in unison with laptop sales)

alienware-laptopStephen Baker, an analyst for industry watchers NPD, shared with me a wider picture of how retail PC sales break down. The way he put it made measuring the rise and fall of sales percentages seem dumb—there really aren’t any sales to lose: “In US retail, 80% of sales are notebooks now,” he said. “Start throwing in stuff like iMacs and all-in-ones”—which share more hardware DNA with laptops and Netbooks than traditional desktops—”and it gets even higher.”

The Buyer’s Dilemma
To understand why this is happening doesn’t take anything more than a little empathy. Put yourself in the shoes of any number of potential consumers, be it kids, adults, techies, or luddites. In virtually any scenario, a laptop is the sensible buy.

Take my dad. Despite spending three decades in front of commercial jet instrument panels, his relationship with computers is, at best, strained. When he came to me a few months ago asking for advice about a laptop to replace his desktop, I assumed it was a just a whim, based on what he saw happening around him. It wasn’t, at all. As someone who uses a computer mostly for news, email, music, etc—like a significant part of the population—he was actually being intensely rational. A laptop would do everything he needs simply and wirelessly, with a negligible price difference from a functionally equivalent desktop. If he wants a monitor, keyboard and mouse, he can just attach them. Choosing a desktop PC wouldn’t just be a not-quite-as-good choice—it’d be a bad one.

There are tradeoffs

But these tradeoffs aren’t nearly as pronounced as they once were, nor are they as consequential. On account of the huge demand and sales volume, newer mobile processors have become a hotbed for innovation, now rivaling most any desktop processor, and mobile graphics engines—though still markedly inferior to dedicated desktop cards—have improved vastly in recent years, to a point where most consumers are more than satisfied.

And if you really look out for them, there are some amazing deals to be had on new notebooks. (Look at Acer’s 15-inch, 2.1GHz Core 2 Duo, 4GB DDR3 RAM laptop with 1GB GeForce GT130 graphics card and Blu-ray for $750, and then try to build the equivalent in a desktop at the same price.)

The important takeaway here is that the performance sacrifice you make in owning laptop is minimal, and mitigated, or even outweighed, by its practical advantages. Want a bigger screen on your notebook? Hook it up your HDTV. Want more storage? Buy a cheap, stylish bus-powered external USB drive. Want to use your desktop on the toilet? Good freakin’ luck.

A Form Factor on Life Support
But no matter how irrational a choice the desktop tower is for the regular consumer, sales won’t hit zero anytime soon. As we’ve hinted, much of this can be explained by simple niche markets: Some businesses will always need powerful workstations; older folks will feel comfortable with a familiar form factor; some people will want a tower as a central file or media server; DIY types will insist on the economy and environmental benefit of desktop’s upgradeability; and a core contingent of diehard PC gamers, despite their drastically thinning ranks, will keep on building their LED-riddled, liquid-cooled megatowers until the day they die.

Baker sees another factor—less organic, more cynical—that’ll keep the numbers from bottoming too hard. “Desktops are a lot more profitable than notebooks for a lot of reasons, not the least of which is that big shiny monitor, which has a nice margin attached to it. For the retailers, people tend to buy a lot more peripherals and accessories when they buy desktops than when they buy notebooks.” Even if the volumes are ultra-low and concept is bankrupt, retailers are going to keep bloated, price-inflated desktops and desktop accessories out there on the sales floor until they’ve drained every last dollar out of them.

To read the full article click here.

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