Desktop PC makers ‘must innovate or be forced out’

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The situation of a PC world isn’t in its best condition nowadays, as the biggest companies are out of new ideas. They need to develop and implement something new and innovative or they will be forced out until 2020.

More and more people give up on PCs and laptops, switching to tablets and oversized smartphones. Consequentially, even such giants in the PC industry as Lenovo, HP, Dell, Asus and Acer are failing to keep their posts within the market. Their profits don’t exceed 3% to 4%, according to the Gartner market research organization.

According to Tracy Tsai who works at the company as a research vice-president, the regular business model of the PC industry doesn’t work anymore. In five years the market share gain of five greatest mobile PC companies increased from 65% to 76% only due to profitable revenue.

In five years till 2015 the worldwide sales of laptops and desktops has fallen by 22.5%. It expects sales to fall a further 7.3 per cent this year and predicts that the number of PCs in use around the world will drop by 7.6 per cent between now and 2019.

Gartner believes that these trends will continue to erode revenue and profit. Ranjit Atwal, a co-author of the report, said that although big brands such as Sony had pulled out from large parts of the PC market, the remaining players survived only because of efficient supply chains.

Gartner says that to survive PC vendors must shift their focus from gaining market share and seek product innovation and new business models.

One possibility is that PC vendors could make devices for third parties, such as Facebook, which could sell them at a loss to drive customers to their platforms.

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