New data out this week provides further evidence that the best days of desktop and notebook computer sales are behind them as consumers continue to favor tablets and smartphones instead.
Research from IDC shows that in 2012 sales in the “smart connected device market” rose by 29.1 percent over 2011. The smart connected device market covers all four product types – desktops, notebooks, smartphones and tablets. But dig just below the surface and you’ll see the winners and losers.
Sales of smartphones rose by 46.1 percent in 2012, over 2011, and tablets rose by 78.4 percent. Notebook sales, though, fell by 3.4 percent while desktop computer sales fell by 4.1 percent.
I first wrote about the smart connected device market when IDC released a similar report in December 2012.
The numbers confirm what most of you already know: Tablets and smartphones are cool while notebooks and desktops are so last decade.
“Smartphones and tablets are growing at a pace that PCs [laptop or desktop] can't realistically keep up with because of device prices and to some extent disposability,” said Ryan Reith, program manager of Worldwide Mobile Device Trackers research at IDC. Not only are smartphones and tablets more portable than laptops and desktop computers, Reith says the former are coming down in price as well. And by “disposability,” he’s referring to the fact that consumers are replacing their smartphones, in particularl, frequently, thus generating more unit sales for those products.
I suspect that smartphone “disposability” is also driven by the fact that, at least in the U.S., wireless carrier service contracts, which entitle the buyer to purchase a device at a much-subsidized price, expire after two years. In fact, carriers often waive the two-year contract within a few months of expiration. Add to that the frequent refresh cycles of devices by smartphone makers and their heavy promotion that the new Samsung Galaxy S III or Apple iPhone 5 is SO MUCH BETTER than the previous model that YOU MUST HAVE IT! – and buyers can be putty in device makers’ hands.
Also, IDC notes, average selling prices (ASPs) for tablets declined by 15 percent in 2012 to $461 while smartphone ASPs also declined to $408, which should further drive sales.
Compared to smartphones and tablets, notebook and desktop computers are so “been there, done that” that shoppers choose the new devices. Personally, though, while I no longer have a desktop computer, there are some tasks that my tablet can’t do that my laptop can. Just to give you one example, if I want to edit a post I just made on my Facebook page, I can’t do it on my Apple iPad; I need to switch over to my MacBook Air.
Nonetheless, the market shift to portability continues and favors some vendors over others.
The leading smart connected device vendors in 2012 were those with a wider variety of smartphones and tablets while the weaker performers were those more reliant on notebooks and desktop computer sales.
Of the top five vendors of smart connected devices, the gainers – based on sales increases in 2012 over 2011 -- were Samsung, 119.3 percent, Apple, 44.3 percent, and Lenovo, 61.4 percent. The losers were number four HP, minus 8.5 percent, and number five Dell, minus 12.9 percent. Sales were based on units shipped, not revenue.