The Friday, November 28, 2014 online edition of Barrons included a story written by Tiernan Ray on the outlook for this year’s holiday buying season for consumer PCs. The title of the story is Intel, AMD: This Is the Beginning of the Consumer PC Recovery, Says Wells. The article is written around comments from an analyst at Wells Fargo, David Wong about the condition of the consumer PC market. Wong’s comments, in turn, are based on comments made by HP CEO Meg Whitman, which she voiced during an interview on CNBC. The CNBC interviewer was David Farber.
Whitman’s comments: “We saw pretty strong results from the consumer in the fourth quarter and again, I think it’s a refresh cycle” in my opinion are conservative. The key phrase, for me, is “refresh cycle”. But perhaps renewed consumer interest in PCs goes beyond merely refresh cycle replacement of existing equipment. After all, with laptops running Windows 8.1 available from HP at a cost of a mere $229.00, it’s difficult to see how some segment of the tablet market (not to mention the Chromebook market) won’t pause to think long and hard before plunking down cash on a device without a keyboard and a much higher retail price.
If this segment of the tablet market converts into buyers of ultra low cost PCs, then, in my opinion, we will be looking at something more than simply a refesh cycle. Bottom line: with an improved Microsoft Windows 8.1 O/S, a keyboard, reasonably light weight, and manageable dimensions, these low end laptops represent a much better deal than their tablet competition for consumers in need of a computing experience (as opposed to simply a home entertainment smart box).
Microsoft certainly stands to benefit from any uptick in the consumer segment. One can argue the cost of the Windows 8.1 O/S for OEMs marketing these ultra low cost PCs is likely to be a giveaway, but the opportunity opened for sales of Office 365 Personal, Office Pro Plus, etc. shouldn’t be discounted.
The whole Microsoft, Intel, AMD and hardware OEMs ecosystem looks pretty good, at least on Black Friday.
Ira Michael Blonder
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