The PC industry celebrated its 35th year anniversary in 2010. From its humble beginning as hobby computer kits in the spring of 1975, the PC industry has come a long way. In 1975 less than 50,000 PCs were sold with a value of about $60M. From this limited start the PC industry has grown to unit sales of over 320M units in 2010. PC retail revenue topped $320B in 2010. The rapid success of the iPad and similar products is expected to increase total PC revenue in the next five years. The next table shows the tremendous growth of the PC industry in the last 35+ years. The new PC category defined by the iPad will give a strong growth boost for a few more years.The sheer size of the PC industry limits its growth rate, but the yearly worldwide sales will grow by over 36% in the next five years—from 325M units in 2010 to nearly 517M in 2015 or a 9.8% compound annual growth rate. Worldwide number of PCs in-use surpassed 1.4B units in 2010 and will top 2.1B units by year-end 2015. Worldwide cumulative PC sales topped 1B units in 2002, 2B in 2007 and surpassed 3B in 2010—and will pass 5B units in 2015. PCs in-use reached 296M in the U.S. in 2010 and will top 390M in 2015.
Yearly PC sales for the U.S. and the main regions of the world are summarized in the next figure. North America will remained the largest region through 2007. All figures are in millions of units.
Figure 1.1: PC Sales by Regions
PC revenue was growing slower than unit growth due to considerable price declines and saw a pause the last two years due to lower unit sales growth than price declines. The worldwide PC revenues were $251B in 2000, which increased to over $333B in 2007. Worldwide PC revenue will decline to $320B in 2010. Worldwide PC revenue will grow again in the next five years to $382B in 2015, which is due to the unit growth boost from the iPad and competing products.
This PC forecast consists of three product segments—PC servers, desktop PCs and mobile or battery-powered PCs. Mobile PCs have three categories—notebook, netbook and pad/tablet, but are currently dominated by notebook PCs. The growth of pad or tablet PCs will change the mix in the next five years. Sales of the three PC segments are shown in the next table.
The desktop PC segment remained the largest PC segment through 2008. Mobile PCs are taking market share from the desktop PC segment. Mobile PCs include all laptop, notebook, netbook, pad/tablet and other mobile PCs. The emerging tablet PCs and pad PCs are included in the mobile PC segment and is having a major impact with the success of Apple's iPad. PDAs and Smartphones are excluded. Worldwide mobile PC unit sales topped desktop PC sales in 2009 due to the exceptional success of netbook PCs.
PCs in-use for the main regions of the world is shown in the next figure. Asia Pacific became the largest region for PCs-in-use in 2004. All figures are in millions of units.
Figure 1.2: PCs In-Use by Regions
Worldwide PC in-use has grown from 98M units in 1990 to over 1B systems in 2007 and will top 1.5B in 2015.
PC sales per capita and PCs-in-use per capita indicates the maturity and PC penetration rate of a given market. The higher the PC penetration rate is, the lower the growth is. The next table shows the PC sales per 1,000 people and PCs-in-use per 1,000 people in the U.S. and worldwide.
The table clearly shows that the U.S. penetration is rising rapidly and signals that the PC market is maturing. However, the pad/tablet categories are finding new PC users and are increasing the average number of PCs per household. Western Europe also has relatively high PC penetration rates. The rest of the world is further behind in PC sales and PC usage per capita and therefore has room for continued growth.
From its hobby computer roots in 1975, the PC grew to become a useful productivity tool by 1980 for office applications. In the early to mid-1980s the foundation was established to make the PC ubiquitous by the 1990s. De facto hardware and software standards were established and the key PC application segments emerged.
By the mid-1980s the PC became the driving force for the whole computer industry, and it retained this crown for over 10 years. PC industry dynamics changed by the late-1990s when PCs became the means to get to the Internet. Since the late 1990s the Internet has become more important than the PC industry. Today the Internet applications are the main driving force for the PC and the whole computer industry. But it is important to understand that the foundation of the Internet is mainly based on the PC industry and a vast land-based packet communication network. In the next decade a cellular-based packet communications network and broadband will further grow the Internet applications and the Internet access devices.
Over the next 10 years the PC industry will prosper and thrive with two additional driving forces—consumer electronics devices built with computing platforms and mobile devices such as Smartphones and multi-function cell phones. The PC industry is very competitive and has a good record of adapting to emerging technologies and market trends. This is likely to happen again and the PC industry will embrace information/digital appliances and mobile devices. The latest example is the Apple iPad which is expanding the PC market with a new segment that is focused on providing media content such as music, video, print publications, games and other Internet/cloud-based content.
Computer hardware and software platforms are invading
the fixed function electronic devices in the
telecommunication, consumer electronics, auto
electronics and related industries. The long-term trend
is clear: most electronic devices will sooner or later
be based on microprocessors, software, networking and
other computer hardware technologies. This will happen
because the cost decline, capability growth and
flexibility of computer platform-based designs
eventually become the best solution. The key question is
not if this will happen, but when will it happen in the
various product segments.
Dell and HP are currently the leading PC manufacturers in the last seven years. The next table shows the historical PC sales of these two companies. Note that the PC sales of Compaq and HP are combined for all the years including the pre-merger years shown in the table (1990, 1995 and 2000).
Compaq, Dell or HP/Compaq have been the PC sales leader since 1994 in the USA and worldwide. Dell became the worldwide PC sales leader in 2001, but was surpassed in 2002 by HP because of its merger with Compaq. Dell took the lead again in 2003 and kept the lead through 2006. HP regained the worldwide lead in 2007 and is the current leader. Dell also lost its lead over HP in the USA in 2009.
Dell has a much stronger market share in the USA than worldwide. This is because Dell’s business model is fully developed in the USA, but remains in the start-up phase or in the early to mid-level development phase outside the USA. As Dell’s business model grows and takes hold outside the USA, Dell’s market share is likely to strengthen. Dell may not establish as high a market share outside the USA, but the market share will grow as Internet sales grow in the developing countries. Dell lost market share to HP starting in mid-2006 due to HP's strong performance. In response Dell is starting to use the reseller distribution channels and this should strengthen Dell’s competitive posture versus HP.
The success of the iPad is rapidly making Apple a contender for the top unit sales slot by 2012. In the current forecast Apple's iPad and Macintosh PC will surpass HP's PC sales in 2012 or 2013.
The report and spreadsheet also have PC sales estimates for other PC companies: Acer, Apple, Lenovo, NEC/Packard-Bell, Toshiba and historical sales data for Compaq, IBM and Gateway.
The PC has expanded its application range dramatically since 1975 and will continue to expand its opportunity sphere. There are currently new or emerging opportunities for PCs as summarized in the next table.
The biggest new opportunity is the media pads and tablets, which was defined by the Apple iPad. This category is projected to expand tremendously in the next five years and will made the PC industry larger than previously forecasted. This report has estimates and forecasts for this new product category including Apple iPad sales forecasts.
The infrastructure that will be used to connect and deliver services to mobile and fixed Internet access devices is another opportunity for PCs—especially PC servers. Most of the mobile Internet service content will be stored in databases that will run on PC servers. These so-called server farms have grown tremendously in the last few years. The service content will be distributed to additional caching servers as part of the Internet infrastructure. Caching servers are used for performance response time enhancement. The number of PC servers needed to feed the information appliances will be proportional to the installed base of Internet access devices. The Internet access devices will be counted in billions and the PC servers will be counted in millions of units.
The home PC server is already established and will continue to grow in the next decade. Multi-PC households use home PC servers to simplify Internet access and to coordinate other PC activities. A home server may not increase the number of PCs in a household because the function is served by one of the existing PCs. However, the home server PC is normally a more capable PC, which increases the average consumer PC price.A recent PC opportunity is the netbook PC that first appeared in 2007. The netbook had exceptional success in 2008 and 2009 and accounted for over 17% of mobile PCs in 2009. Many laptop users bought a netbook as a second portable PC. Netbook PCs are also bought to augment desktop PCs or as the first PC due to their low prices. However, the media pad has stunted its growth since 2010, but the netbook category could make a come-back or it may change and become so-called Smartbook or Ultrabook PCs.
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