PC industry now faces major challenges

Posted by Nermin Hajdarbegovic

Opinion There is no other way of saying it, PC makers are in a world of trouble. The slump is getting worse and many punters now believe that we might see two subsequent quarters of double digit decline. The trouble is, they can’t do much about it, at least not in the short term. 

PCs have matured years ago, leaving very little room for innovation. Over the past five years we didn’t get to see much in terms of evolution. Netbooks proved a dead end, Ultrabooks are not selling well, and at this point the only relatively new form factors that seem to be doing well are all-in-ones and to some extent nettops. In contrast, the smartphone market was revolutionized in the space of five years. The tablet market was created from scratch in just three. 

However, the humble PC is not about to go extinct anytime soon. Sales will remain weak, as there is next to no incentive to upgrade. The PC is so mature that it is starting to resemble a typical household appliance, and nobody goes out and buys a new microwave every two years. This means that upgrade cycles will become even longer. Luckily there are some technologies that could slow down, if not reverse the negative trend. 

High end tablets currently ship with 1080p or Retina displays. The latest flagship smartphones also pack 1080p screens in just five inches, but PCs are still stuck at 1080p, with a lot more screen acreage to cover. What’s more, 1080p is still reserved for high-end notebooks. Most cheap SKUs still ship with 1366x768 screens, yet they cost as much as insanely sharp tablets. The only hope for the PC industry is 4K, but 4K or UHD panels are still prohibitively expensive and it will take a few years before we see affordable 4K monitors in the 23- to 26-inch range. Pricing is not the only issue, though. More resolution means more GPU muscle, which translates into more heat and less battery life. There is almost no 4K content, either. Although websites might look a bit better on 4K, most sites simply don’t use high res graphics and until they start using high quality images the difference won’t be anything to write home about. We will get there, eventually.

The vast majority of PCs still ship with cumbersome and slow mechanical hard drives. We are seeing some promising developments in the ultrathin notebook market, as vendors start to include hybrid drives and low capacity SSDs in mid range gear. Western Digital and Seagate have already announced interesting 2.5-inch drives with NAND on top and they should bring the best of both worlds to cheap PCs. PCs simply need to be more agile, and venerable mechanical drives can’t help. Fortunately though, SSDs are already going mainstream and a 120GB system drive now retails for about $100, down threefold in just over two years. 

Touchscreens are already here, but software support is lacking. Microsoft botched the Windows 8 launch so horribly that it still has just a handful of touch friendly apps. Consumers simply see no point in investing in a touchscreen ultrabook, at least not yet. Luckily though, hardware makers have no choice but to adopt touchscreens and we should see a lot more touch enabled ultrabooks with Haswell chips toward the end of the year. Hopefully Microsoft will get its act together and get more developers on board in the meantime. 

PC processors are evolving, although not as fast as their SoC counterparts in the mobile world. However, the biggest changes in the processor arena will probably come in low end and mid range gear. The industry calls it “good enough” computing, and low cost x86 chips with integrated graphics, or upcoming SoCs, should be good enough for quite a few consumers. These cores, such as AMD’s Jaguar of PlayStation 4 fame and Intel’s upcoming 22nm Valley View Atoms, have the potential to upset the market over the next couple of years. So called “big core” chips aren’t going anywhere, but they will be reserved for professionals and enthusiasts. 

The advent of frugal yet relatively powerful processors will result in even cheaper AIOs and nettops. With a tiny footprint, these platforms are already relatively cheap to produce and with more RAM and solid state storage, performance is improving fast. Many vendors have already started churning out small form factor PCs based on ultra low voltage chips, such as Intel’s Core i3 U-series parts and AMD’s ULV Trinity APUs. These mini PCs are very quiet, affordable and good looking – they are slowly becoming a viable alternative to boxy desktops. In addition, they consume just a fraction of the power, which is great news for the “always on” crowd and businesses. Replacing a traditional desktop with a CCFL screen with a mini PC or an AIO with a LED screen makes financial sense in the long run.

Sadly though, the PC industry is running out of time, and fast. It will take years for UHD displays to go mainstream, although we are already starting to see notebooks with various better-than-1080p resolutions. SSDs are here to stay, along with hybrid drives, which should have been adopted more quickly. We will see a gradual evolution on the storage front. As for touchscreens, it is hard to say at this point. The hardware is ready, but Microsoft isn’t. Mini PCs and all-in-ones based on cheap next generation chips seem to have a lot of potential and let’s not forget the cool factor. They simply look a lot better than traditional desktop boxes.