Slower Outlook for PCs but New Apple MacBooks Gain Traction

It’s hard to hide from the downbeat headlines these days – which pretty much sums up what we’ve been finding in the PC sector.

But there are small glimmers of hope. ChangeWave’s latest survey on consumer PC buying shows weaker demand for the holidays – yet there are also positive signs for Apple (AAPL), and most surprisingly, for Dell (DELL).

The October 23 – November 3, 2008 ChangeWave survey of 3,699 consumers focused on personal computer demand for the next 90 days.

First, here’s the bad news:

PC Market Ain’t What It Used To Be

Just one year ago, 11% of respondents planned to buy a laptop in the next 90 days, compared to only 8% in the latest survey. A similar drop has occurred for desktops, with 8% planned buyers last November dropping to just 6% currently.

The PC slowdown is occurring in tandem with the weakest holiday electronics spending levels ever recorded in a ChangeWave survey. Typically, we see a big pop in electronics spending for the holidays – but not this year.

Only 19% of respondents say they’ll spend more on consumer electronics over the next 90 days compared to 43% who say less – a net 40-pts worse than one year ago.

But New Apple MacBooks Gaining Traction

Midst the bad news, Apple and its newly revamped MacBook line are still managing to gain traction with consumers.

The new Apple MacBooks feature aluminum unibody enclosures and improved graphics, as well as glass multi-touch trackpads – and 7% of respondents now say they’re likely to buy one over the holidays.

In addition, another 6% say they’re likely to purchase the traditional White MacBook Laptop, which Apple recently lowered the price on to $999.

Overall, one-in-three respondents (33%) plan to buy an Apple laptop over the next 90 days – up 4-pts since September – while 27% plan to buy an Apple desktop, a 1-pt increase.

But before you open your champagne bottle for Apple, here’s a big caution: While the Apple numbers represent an improvement over our September survey, they’re still below our August results. And in terms of desktops, they’re 2-pts below those of a year ago.

Moreover, the uptick for Apple is occurring in the context of a rapidly shrinking PC market.

Nonetheless it’s not easy to increase market share right during the worst spending environment in years. Thanks to their refreshed line of MacBooks, Apple is doing just that.

A Surprise for Dell

Something unusual is happening with Dell. For the first time in almost three years, Dell consumer planned purchases look positively upbeat.

First, planned purchases of Dell desktops have taken a surprising leap, increasing a full 11-pts to 37%. Planned purchases for Dell laptops (33%) also are up 2-pts.

To find out more about Dell’s rise, we asked those consumers who said they’re purchasing a Dell PC in the next 90 days to tell us why. The overwhelming response: Dell currently offers the best value.

As one respondent put it, Dell provides “Competitive pricing, wider availability in retail outlets, and its Vostro line offers clean hard drives with no garbage programs preloaded – and Windows XP is an option.”

Some consumers are purchasing Dell PCs as a holiday gift. One respondent told us, “I like it as a replacement for my older machine and as a gift. The pricing is such that they qualify as a high-end gift for close, older family members that have no PC.”

The above comments notwithstanding, tremendous caution is needed in assessing the latest survey results on Dell.

First, consumer purchases represent less than 20% of Dell’s overall PC revenue, while the vast majority of the company’s revenue comes from the corporate side. And it’s on the corporate front that the IT spending pullback in 2008 has had a brutal impact on Dell and other PC manufacturers.

Moreover, there are no signs that the overall PC market will be improving at any point in the near future. In fact, the recession in corporate IT spending continues picking up steam.

That said, after a long three-year slide in market share the current upturn is welcome news for Dell, and perhaps a sign that there’s light at the end of the tunnel for the former industry leader once the economy starts to improve.

Hewlett-Packard

Hewlett-Packard (HPQ) recently announced earnings that surprised to the upside due to the company’s cost cutting initiatives, and their worldwide, well-diversified portfolio of products and services.

But in terms of their U.S. PC sales outlook, our survey shows mixed results for H-P over the next 90 days. Planned consumer desktop purchases (17%) are down 4-pts for H-P, while planned laptops (22%) are up 2-pts. Note that about 70% of H-P’s sales come from outside the U.S., whereas our surveys focus primarily on the U.S. market.

Jim Woods co-wrote this article

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This article summarizes the results of a recent ChangeWave survey. ChangeWave runs a research network of 20,000 business, technology and medical professionals -- as well as early adopter consumers -- who spend their everyday lives working on the front line of technological change. For more info on ChangeWave, or to sign up for real-time email alerts on the latest survey findings, click here.

Comments

[Roger Knights:]

"it’s not easy to increase market share right during the worst spending environment in years."

Apple's share-gains at competitors' expense insulate it from the effects of a shrinking pie. Apple only needs to outrun the hindmost, not the bear.

2008 Dec 10 08:19 AM

[Timeline St...:]

I would remind everyone that the MS DOS system, and in fact the Apple system, originated from a time that was the worst spending period prior to this one - the late 1970's and early 1980's. At that time, the auto makers were suffering their first death, and the steel industry, transportation, and other 'smokestack' industries were seeing the first pains of globalization. Alongside that scenario, the tech revolution was born.

I have no doubt that the U.S. can do it again, if we are smart about further innovations in IT. And this one will not be unfinished like the last IT revolution, which in a sense made data cheap but left the acquisition of information difficult. The next wave will make information readily available and usable, and Apple will lead the way again.

I'm afraid that Microsoft, with a few exceptions like SQL Server, has lost the way. They are so muddled that they cannot possibly deliver on this promise because they are locked in a business model of overcomplicating simple tasks due to their misperception that switching costs will prevent them from losing customers. Like all of Apple's success, once it's done, it will seem so remarkably simple that one will wonder why it wasn't always that way.

2008 Dec 10 10:41 AM

[brewer:]

Mark my words, iPod sales (the iPod Touch, specifically) are going to be off the charts this holiday season, as well it should be.

Apple's touch devices are so good, they are selling like crazy even to PC die-hards. This is the brilliance of the iPod in the first place. Windows users thought they had a decent computer already, they didn't want to be told they didn't. They even knew people, posing as technologists (who had really just settled for the most common tech available for it's popularity, not it's features, etc...) who reinforced the notion they had made a good decision with WIndows.

Then along comes Apple with great devices that demonstrate how totally lacking their computer experience truly is. In effect, they have taught by example.

Microsoft is only ever about propping up it's monopoly. Nothing more than that. Just look how they embrace and extend open standards such that they will become windows only. Well, windows mobile is history, and people used to compare XP and older versions of OS X and say they were close. No one ever really seriously said XP was better, just close (and more popular). That has advantages. But now, no one is daring to even compare Vista to Leopard. That would be ridiculous.

People are cheap sometimes to save a buck. Especially in difficult times. But people don't want to make a stupid decision and buy a clunker product like a PC hobbled with Vista. It's not going to bankrupt anyone to get the Mac. It's not a luxury item at all. People are smart enough to realize that a quality product should last a long time and is worth the investment rather than saving a few bucks on a cut rate windows computer that isn't even going to work more than a couple of years (if that) before it's in need of (at the least) a complete format/restore. About 90% of the people don't want to do that sort of maintenance, and they are learning that it's free at the Apple store (mostly because it's rarely needed and many times more straightforward than the same procedures in Windows.)

2008 Dec 10 11:37 AM

[ppgreat:]

I just don't understand this bottom feeding mentality with Dell purchases. They are the clunkiest machines on the market. And, as a company, Dell is having some major issues. Why buy into that as an IT department?

2008 Dec 10 11:51 AM

[Neil Anderson:]

Just because something is cheap doesn't mean it's a good deal.

2008 Dec 11 10:40 PM