So we’ve heard that PC sales are down, as are the sales of Windows 8 devices and even Intel is now reporting a 4th quarter loss. So what’s going on exactly? There are several different theories about what could be happening.
1) Some say that the PC is dying thanks to tablets and smartphones. People just don’t need them anymore.
2) Windows 8 is bombing, according to some folks. These negative individuals state that Windows 8 is responsible for the decline, plain and simple.
3) Another sentiment I agree with personally and have stated before is simply that people aren’t upgrading like they used to. They still want/use PCs, but they are getting by on Windows XP/Vista/7 machines with older yet reasonably capable processors like Intel Core 2 Duo and Quads.
If the last reason is what is happening, why? A few reasons. One of the reasons could be that people are buying tablets and smartphones and using them as their primary gateway to Internet content. This relegates the PC to a secondary position, and so people are less interested in upgrading a device they use only on an ocassional/secondary basis.
Another reason could be cost. We live in a time where the economy isn’t exactly strong throughout the globe. For many people, that smartphone or even tablet was a better deal because they have more mobility and in the case of many phones users, they got it for $50-$150 thanks to contract subsidization.
What reason do you think we are in a PC slump? Maybe a combination of all three factors mentioned above or some X-factor I didn’t mention? What do you think the PC industry can do to revive the situation?
I have a wild theory on something that could possibly help. Before you keep reading, I’ll warn you not to take this TOO seriously. It probably wouldn’t work, it would probably prove a disaster. But it is food for though.
Internet Carrier Subsidizing
Right now, you get a phone cheaper if you agree to use just one service, and only that service for at least a bare minimum of time. If you cancel, you get stuck with some pretty massive fees. Could the big carriers like Time Warner do something similar in the United States?
Imagine if they offered Windows 8 touch all-in-ones for around $200-300 dollars with a 2-year contract. Or even a low-to-midrange laptop for around $50 with a two-year commitment.
Okay, I admit the idea probably wouldn’t work and even if it did would just lock us all down even more. That said, Microsoft has started doing this with the Xbox 360, offering it for cheaper with the willingness to sign an Xbox Live contract. The success for that model for Microsoft has so far been limited, though.
So what are some of the problems standing in the way of such a subsidized PC offering? First, it would be hard to convince Internet Providers to buy PCs in bulk and commit to such a model. Second, a two-year contract for ISP service might be a hard sell for most consumers. Now, there are some consumers that would jump at this though. I’m talking about those that have good enough credit to get net service but bad enough credit that they can’t get financing on a new PC. They can’t afford $600-$1000+ for a PC– this might offer an alternative.
What do you think, is there any world in which this crazy idea would work or do you think it has too many faults to actually be executed successfully? Even if it was in place, would it really help PC sales in the long-run or not?