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How Intel Will Drive Demand for New PCs

Intel and Microsoft want to make sure that businesses and consumers really understand that it is time to upgrade.

August 31, 2015
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In late July, I wrote a column suggesting that negative PC growth is the new norm. I pointed out that at best we will not sell more than 300 million PCs a year, and at worst demand could be in the 250-260 million range within three years.

Opinions Negative growth in PC demand is a huge problem for the tech industry, which is expending a lot of energy trying to get things moving again. Two things that tech's major players hope will help move the needle: Windows 10 and Intel's Skylake.

That might not be enough, though, so Intel, Microsoft, and their partners are gearing up to make sure that businesses and consumers really understand that it is time to upgrade. I spent three days at Intel's recent developer forum in San Francisco, and was given a behind-the-scenes briefing about Skylake and Intel's strategy to get demand for PCs moving upward. Intel believes that there are between 500-750 million PCs that are at least 4-7 years old, and it plans to launch a campaign to convince people that old PCs are heavy, underpowered, and well beyond their prime.

Intel will then show off new ultrabooks, 2 in 1s, convertibles, and various thin-and-light PCs to try and move these millions of older PC users to newer models, which in turn will help grow the PC market again. We already know that part of this strategy will work in enterprise. Historically, when Microsoft releases a major new OS, a good part of the IT market adopts it in the first three to four years. When they do so, they often buy new PCs. Intel, Microsoft, and all the PC vendors believe that demand in IT starting next year could grow at least this segment of the market.

But consumers are trickier to convince. The reason that so many older PCs are still in use is because they still work. Ironically, the PC industry has itself to blame for this. In the mid 1990s, as PC manufacturing in large quantities hit its stride, the need to have greater quality control kicked in and PC vendors continually cranked out PCs that were of good quality and just did not break. Of course, some could have had issues with logic boards, software, and even storage, but for the most part many PCs easily last four to five years with some stretching even longer.

As a result, the campaign to compare older, clunkier models probably needs to be a big push to this crowd if they want to get them upgrading. If there is any good news for this year, it comes from various researchers who say that shipments of 2-in-1 devices like Microsoft's Surface Pro 3, Dell's XPS 13, and the Lenovo Yoga 3 Pro($949.99 at Lenovo) are expected to grow almost fivefold this year. Even so, these same researchers believe that overall sales of PCs in 2015 will be off as much as 10 percent.

I suspect that for the key PC players who drive the industry, seeing it stabilize and get solid PC upgraders is the best they can hope for.

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About Tim Bajarin

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Tim Bajarin

Tim Bajarin is recognized as one of the leading industry consultants, analysts, and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has provided research to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba, and numerous others. Mr. Bajarin is known as a concise, futuristic analyst, credited with predicting the desktop publishing revolution three years before it hit the market, and identifying multimedia as a major trend in written reports as early as 1984. He has authored major industry studies on PC, portable computing, pen-based computing, desktop publishing, multimedia computing, mobile devices, and IOT. He serves on conference advisory boards and is a frequent featured speaker at computer conferences worldwide.

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