Click to Skip Ad
Closing in...

Devastating PC decline is literally incomprehensible to industry experts

Updated Apr 11th, 2013 9:45AM EDT

If you buy through a BGR link, we may earn an affiliate commission, helping support our expert product labs.

Despite ill omens, the IDC report about PC volume decline hitting -14% in the first quarter shows once again how much trouble the tech industry is having when it comes to dealing with the ongoing computer meltdown. As I wrote last December, IDC has been completely out to lunch about this key trend for years. In March of 2012, IDC was still expecting “desktop and laptop sales to take off in the second half of 2012.” Last December, IDC cheerfully predicted 1.2% growth in computer sales between 2012 and 2016. Of course, the PC industry is tucking into a majestic swan dive that makes those projections downright surreal. How can one of the most respected research firms in the computer sector be so disconnected from reality? The answer is simple: Analysts from largest research firms simply aren’t allowed to call major turning points.

The clients of these research outfits include the largest computer hardware and software companies in the world. Predicting a steep downturn that does not materialize is far more dangerous than closing your eyes and looking away from the imminent collapse. So analysts seem to play it safe and deliberately ignore the most negative scenarios.

The same exact pattern happened before the epic mobile handset downturn of 2001-2002 and the nasty consumer electronics recession of 2008-2009. Big research firms are not in the business of calling big cycle turns; their core business is holding the hands of major hardware vendors and making mostly soothing noises.

The downside of this is that those companies who actually believe in the forecasts of IDC and its ilk can get their product road map planning disastrously wrong. It is now becoming clear that all laptop and netbook vendors should have started planning a very aggressive shift towards other product categories for 2013.

Fairly soon, we will discover which ones have their escape plans plotted out — and which ones will be caught in the smoldering ruins of the PC industry.

After launching mobile game company SpringToys tragically early in 2000, Tero Kuittinen spent eight years doing equity research at firms including Alliance Capital and Opstock. He is currently an analyst and VP of North American sales at mobile diagnostics and expense management Alekstra, and has contributed to, Forbes and Business 2.0 Magazine in addition to BGR.


Latest News