PC manufacturers, across the board, including Dell, have reported better sales results over the last several quarters. We think this trend will continue for the near-term future (meaning at least through to Q2 2015). We see four factors at work, which promise to continue to drive new PC purchases:
- the debut of ultra low cost PCs, price competitive with Google Chromebooks
- an improved Windows 8.1 O/S, complete with better integration of tile/app and desktop computing environments
- consumers hungry for storage and computing speed, exhausting upgrade efforts and buying new hardware
- developer community acceptance and implementation of Microsoft’s API and SDK strategies, which will deliver more computing features to PC owners, thereby narrowing the feature gap between Windows, OSX, and Android PCs
Here’s some point by point detail: 1) with the 2014 holiday buying season, consumers are finally able to purchase PCs powered by Windows 8.1 at price point parity with Google Chromebooks. At $199.99 the HP Stream is, arguably, an affordable option for the widest possible consumer segment requiring a Microsoft Windows computing experience. In what we can only call a major achievement for Microsoft, HP’s low end Chromebook entry, the HP Chromebook 14 carries a street cost nearly 50% higher than the HP Stream 11.
Now to the second of our four points: The difference in computing experience quality between Windows 8.0 and Windows 8.1 is substantially. It is not likely enterprise buyers have satiated their appetite for new PCs. Further, another year has passed on the PC lifecycle, so even more older PCs will have to be upgraded. Windows 8.1 resolves many of the Windows 8 issues enterprise buyers complained about, so it is likely the uptick in PC buying will continue for some more time to come.
Consumers looking for a better PC computing experience at a reasonable cost still have the best opportunity to meet their objectives with a PC running Microsoft’s Windows O/S. So the mid to high end of the PC market, meaning the segment requiring solid state drives, HD monitors and matching graphics, etc, are more likely to stick with Wintel than to gravitate to OSX PCs.
Finally, Microsoft’s decision to release a number of APIs and SDKs empower app developers to build Office 365, and even hooks to Azure into their solutions. As developers consume these new tools, consumers should be able to use Wintel PCs to consume a lot of the apps, heretofore, only available via Android, or iOS devices. Effectively the feature (and, one can argue, the entire computing experience) gap between device architectures should narrow, which should further pump up PC sales for sometime to come.
Ira Michael Blonder
© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved