Return of the Guru

PC Shipments Are Off: But Why?

Ara Trembly
Insurance Experts' Forum, April 18, 2011

When things don’t go the way the experts expect them to go in the technology universe, it is always entertaining and instructive to watch how those who make predictions from on high cover their respective hindquarters.

According to a recent report from Bloomberg.com, global personal-computer shipments “unexpectedly” fell 3.2% in the first quarter of 2011 “as businesses and consumers held off on purchasing new machines and shifted focus to tablet computers, market-research firm IDC said.”

IDC had projected that worldwide shipments would grow 1.5% from the year-earlier period, the report notes. “Slower-than-expected commercial growth in the first quarter failed to offset the ongoing challenges in the consumer market,” said Bob O’Donnell, a program VP at IDC. “While it’s tempting to blame the decline completely on the growth of media tablets, we believe other factors, including extended PC lifetimes and the lack of compelling new PC experiences, played equally significant roles.”

Higher fuel and commodity prices, as well as disruptions caused by the earthquake and tsunami in Japan in March, may also have curbed sales, IDC says. The Bloomberg posting separately quotes a Gartner Inc. statement that worldwide, first-quarter PC shipments fell 1.1% to 84.3 million units, the first year-over-year drop in six quarters. Gartner had forecast an increase of 3%.

Since IDC has itself minimized the impact of tablet computing growth as a cause, let’s consider the other possible culprits. Have “PC lifetimes” been extended? Not that I can see. The average shelf life of the personal computer these days remains at about three to four years, and the reason for that has more to do with seemingly endless changes in platforms, software and backwards compatibility of applications than it does with physical issues like power supply failure or hard drive breakdown.

I’m not sure what “lack of compelling new PC experiences” means, since any new experiences would inevitably be tied to software or remote services that continue to be accessible via the personal computer. And while we know that the tsunami did affect some PC production capability going forward, it’s hard to believe that this particular ripple actually reached the business and consumer markets by the end of March. 

What surprises me is that my fellow pundits did not seize on the more obvious answer for the cutback in computer sales—namely that businesses and individuals are holding on to their allegedly outdated equipment because they can’t afford to buy the new stuff. In case the cognoscenti have missed it, the economy here and abroad is still in a world of trouble, and purchases of new equipment are being scrutinized more than ever. Nowhere is this kind of frugality more widespread than in the insurance industry, which has become famous for keeping anything that remains even remotely productive—witness the staying power of so-called “legacy” systems and “green screens.”

While many consumers and less financially stressed businesses may believe they should buy a new box once their current device turns three, the truth is that many others have looked at their budgets in light of economic conditions and decided that they could make do with older, less-hip technology for another year or two. 

Of course, this is disappointing to those who want to see shipment numbers continue to increase, but even they must face the reality of a nearly bare cupboard.

Ara C. Trembly (www.aratremblytechnology.com) is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.

Readers are encouraged to respond to Ara using the “Add Your Comments” box below. He can also be reached at ara@aratremblytechnology.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

Smarter Tablet Use Could Transform Insurance

By reducing administrative tasks and automating paperwork, tablets can increase agentsí selling time and help them respond to customers in seconds, not hours.

Insurance Wake-Up Call: Embrace the Shared Economy Opportunities

SMA believes that insurers must embrace a "shared economy," crowdsourcing and open innovation to get ahead in the new marketplace.

Silicon Valley Ventures

A trip to area hotbed of technological innovation calls into question the potential viability of insurers' legacy systems, operations and processes.

The Lion and the Mouse: Start-ups Pitch to Top Insurer

Insurers should be on the lookout for innovative partnership arrangements that produce unique and valuable solutions.

Open Source Continues its March into the Enterprise

Insurers have a range of open-source options for running their businesses.

Sometimes The Best Way to Speed Up is to Slow Down

Insurers across all lines of business increasingly recognize that their core systems are not able to properly position them to deal with imminent competitive threats.