Forecast share of US personal
...with analysis & insight...
I’m often asked what kind of personal computer (pc) I would recommend. I always start my reply
with: what do you want to use your new computer for? Usually everybody’s needs are a little bit
different, so focusing on those differences can help people decide what they want.
The chart above, courtesy of Forrester Research, shows the projected shares for the consumer PC
market in the US through to 2015. It is a good basis from which to discuss where personal
computing is going. My first observation is what the chart doesn’t show. It doesn’t show how
much or how fast the overall consumer personal computer market is growing in a down economy.
Over the next five years Forrester is forecasting that the overall market size will have increased
Several factors are driving this growth. Firstly, more people are becoming computer literate and in
the developed world a personal computer is becoming a necessity not a luxury device. Secondly,
overall prices at the lower end of the market have fallen to a point that the entry price is now much
lower e.g. Netbooks, than they were. Thirdly, the computing power in all these products has
increased substantially. The new Intel i7, just coming onto the market, has four processors built
into it and contains 731 million transistors. That is nearly double the 463 million transistors in the
earlier processor the i7 chip is replacing, all for a similar amount of money. Fourthly, computers
generally are becoming more reliable and therefore are starting to be able to meet consumer’
needs. By that I mean just switch it on and it works reliably without any hassle. This is an often
overlooked factor that is driving the personal computer growth. This situation has been brought
about on the hardware side by increasingly integrating separate components to reduce the
number of components and thus increase reliability. This is one reason that I generally advise
people to buy a Notebook computer, even if portability is not required. Portable computers are
more reliable than desktop computers. Yes, they do cost more for similar performance, but what
you are buying is more surface integration of components and hence better reliability. Of course,
if you bang the computer about when you travel, or drag the computer in wheeled bag where it
gets vibrated a lot, then reliability will become an issue. But if you gave the same treatment to a
desktop then it would fail more quickly. Reliability has also been improved on the software side.
Microsoft has gradually realised that computers are consumer devices and have been adapting the
operating system to be more reliable. Windows 7 is a lot more reliable and fault tolerant than any
of its predecessors so far. You generally don’t have to mess about so much today but this situation
has been a long time coming and could still be improved. A fifth reason is that the cost of
computer storage has been continually falling just as dramatically as the improvement in
computing power. Without cheaper storage personal computers would be too expensive to
become consumer devices.
There is a sixth reason behind what is happening in the personal computer market, something that
underpins the whole market. Microprocessors (the major part of a computer) are by their very
nature mass market devices. For a company like Intel nearly all of the cost of production is in the
creation of the first chip, subsequent copies cost very little. Having produced that first chip the
maximum amount of profit is obtained by getting that chip into as many devices as possible over
as long a time period as possible. As the new chip is introduced the price of the previous chips
being replaced gets lowered. That is why so much computing power is going into other devices like
the mobile phone. More processing power is going into more products in a continuous process as
each chip is cheap to produce when production has been ramped up.
As the chart shows, consumers bought more Notebooks than desktops in 2009. Now Netbooks are
cutting into the Notebook’s share of the market. Now Tablets are taking sales away from
Netbooks. The success of the iPad is transforming the market. The figures in the chart are
projections from existing sales data not a prediction of what will happen. Extrapolating sales from
the initial launch of the iPad and projecting forward is a guess at best. Certainly we are about to
see a glut of iPad imitators, many at lower cost than Apple’s product.
What is my favourite form factor at the moment for a next purchase? A Toshiba R700 would fit my
needs, but why on earth is this shipping with a 32 bit operating system instead of a 64bit one?
Nothing is perfect.