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Key Competitive Factors in PC Consumer Markets

Market coverage and purchase convenience.

Branding, reputation, and image (the “cool” factor).

Vendor services and vendor performance in meeting the needs of distributors, resellers, and retailers.

Vendor's understanding and targeting of different segments within the consumer marketplace.

Product “wow” factor, notably around: the user interface, form-factors, mobility and communications features, reliability, and data safe-guard features.

Priorities for Consumer PC Market Growth

Consumer markets are now a major revenue opportunity for Tier 1 PC vendors. Important shifts in market share among PC vendors are likely in the next 12 months, based on growth in consumer sales. For the first time in many years, differentiation rather than commoditization is prevalent in consumer PC markets.

PC Vendors Chase Consumer Market Growth

After nearly a decade of relatively steady growth, the global market for personal computers is accelerating, with vendors such as Acer and Apple reporting unit shipment growth in excess of 40% year-on-year in 2007 and 2008.

Much of the growth is coming from consumer segments, with market drivers that are very different from just a few years ago (see sidebar). In the USA, 75% of homes already have at least one desktop or notebook PC (up from 50% in 2001). World wide, sales to consumers currently represent about 40% of desktop and mobile PC sales.

Market research company IDC estimates that in 2008 the global market for desktop and laptop PCs will reach 310 million computers (15% higher than in 2007). World-wide, the market for PCs is forecast to reach $286 billion in 2008 (a PC market size increase of 9.6%). We estimate that about 130 million PCs will be sold to consumers in 2008, up from about 90 million in 2006, and that the shift to purchases of laptops, rather than desktop PCs will continue.

PC Consumer Marketplace:
Growth Drivers in 2008

Larger, more affluent populations in the BRIC economies (Brazil, Russia, India, and China).

In developed countries: a preference for each family member to have their own PC (families sharing resources via their home WiFi network, rather than sharing the family PC).

Increased emotional investment by consumers in their computer-mediated life.

Continued rapid growth in the use of social networks, digital media, and consumer-generated content.

The attractions of mobile computing, highly influenced by habits learned on mobile phones.

Globally, Acer, Apple, Dell, HP, Lenovo, Sony, and Toshiba are the Tier 1 brands in personal computing.

Business segments have been the largest source of sales for most of the Tier 1 PC vendors. For the next phase of their growth, all Tier 1 PC vendors are focused on consumer markets, but there are new competitive factors for growth (see sidebar).

As the market changes, large shifts in market share can be expected in 2008 and beyond.

PC-Mediated Lifestyle Activities Define the New Consumer Marketplace

Branding and clear market positioning are even more important in consumer markets than in business markets. In many consumer segments, style, fashion and reputation are more important than conventional hardware specifications.

Today’s consumer PC markets are being shaped by strong consumer appetite for technologies which support new forms of lifestyle, entertainment, and social activity. In other words, PC-mediated lifestyles are becoming very important to many consumers.

PC-mediated Lifestyles range through solo to family to social activities and have various degrees of mobility needs

PC-Mediated Lifestyle Activities

Until recently, ‘home PCs’ differed little from those used in business. They were bought mainly for personal email, home office, desktop games, and some educational needs.

2008 sees a blizzard of new lifestyle activities for which consumers now like to use PCs.

Some activities are mainly solitary, some involve the family, and some involve groups of friends or communities.

Common themes are dependence on communications features, access to media and information, and PC mobility (the “whenever” and “wherever” requirement).

Thanks to tools and services available on the internet, specially purchased applications play a much smaller role than in the past.

Mobility has become a key consumer need - even if that only means the ability to sometimes use a laptop while watching TV in the family room, and sometimes using it in the study or bedroom.

Such preferences are very different to the client computing requirements, value assessment, and purchase considerations made by IT managers in large business.

Continue to next section of this special report: PC Retail Distribution