End of the road for the good old PC

We are probably witnessing the last phase of desktop PCs in the country. PC vendors are pushing mobile PCs including laptops and tablets as against traditional desktops, in line with market demand. The absence of a refurbished-devices market in India will result in the reduced use — near demise — of desktops, much sooner than those in developed countries, say industry players.

“The PC market has not grown for more than the last two years. While it was growing fast earlier, the faster penetration of smartphones has also caused the decline in sales,” says Rahul Agarwal, managing director of Lenovo India.

 “While smartphones help in data consumption, data creation will continue to rely on devices that come with a large screen and a keyboard. We are optimistic about the future of PCs but within the category, internally, we have started to bank on laptops and other mobile devices than desktops.”

According to IDC, overall PC shipments in India for the second quarter of this year stood at 2.19 million units, down 14.1 per cent compared with the corresponding quarter the previous year. On the other hand, Gartner also reported a decline in year-on-year shipments.

The combined desk-based and mobile PC market in India totalled nearly 2.2 million units, a 13 per cent decrease over the second quarter of calendar year 2014. Decrease in consumer demand is said to have led to the decline in shipments.

Globally, Gartner projects a 1 per cent decline in all device shipments in 2015. Desk-based PCs are the only category that is estimated to shrink through 2017 among ultramobiles, mobile phones and tablets. Few other categories that are expected to see degrowth are projected to bounce back eventually but not desk-based PCs.

 “The global PC shipment market is expected to total 291 million units in 2015, a decline of 7.3 per cent year over year, and to show flat growth in 2016. Within the PC market, desk-based PC and notebook shipments totalled 277 million units in 2014. It is expected to reduce to 226 million in 2017,” says Ranjit Atwal, research director at Gartner.

 “Replacement activity across all types of devices has decreased. Users are extending the lifetime of their devices, or deciding not to replace their devices at all.”

Within the India market, another issue that is resulting in the decreased use of desktops is the lack of a viable secondary market. Though organisations including NASSCOM have tried to encourage the use of refurbished devices, most initiatives have not taken off because the price of new devices has been drastically going down and technologies have been changing at an even more dramatic pace.

For most other electronic devices, there is a flourishing secondary market in the country. Large device manufacturers have structured refurbished devices programmes and also have buyback and exchange offers to help customers upgrade to newer and sophisticated devices. But such programmes have not been fruitful for the PC industry.

Says Kiran Kumar, research manager at IDC: “Some dispose their old PC off to recyclers, some may give it away to employees as part of motivation drives and others offer them as donations to non-profit organizations who may require them. But largely, enterprises do not recycle or consider using refurbished PCs in their workplace. However, there is a market of refurbished PCs in India but it is not sizeable enough and hence there is the perception that it may not exist.”

Moreover, buyback schemes of PC makers may not have taken off in a big way because they do not make good marketing tools for manufacturers, says Kumar.