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PC shipments back into growth, but can connectivity make it sustainable?

PCs are often seen as the forgotten child of the technology family, though new estimates suggest there is life left in the segment.

We use laptops every day but never discuss the potential for innovation or a refreshment cycle. These are devices which are largely viewed as commoditised and a segment which has already been through its heyday, so attentions are drawn elsewhere in search of the next billion-dollar idea. But there might be life left yet.

According to estimates from Gartner, worldwide PC shipments, desktop and laptop, stood at 70.6 million units in the fourth quarter of 2019, an increase of 2.3% from the same period of 2018. Across the year, shipments were up 0.6% to 261 million units, with Lenovo and HP leading the charge.

“The PC market experienced growth for the first time since 2011, driven by vibrant business demand for Windows 10 upgrades, particularly in the US, EMEA and Japan,” said Gartner’s Mikako Kitagawa.

“We expect this growth to continue through this year even after Windows 7 support comes to an end this month, as many businesses in emerging regions such as China, Eurasia and the emerging Asia/Pacific have not yet upgraded.”

Interestingly enough, while growth is certainly encouraging the potential might well have been curtailed. According to Kitagawa, without a shortage of Intel CPU products on the market, growth may well have accelerated further beyond the numbers which Gartner is putting forward in its estimates. 2012 was the last time the PC segment experienced a full annual cycle of growth.

These numbers are certainly encouraging, but one has to ask whether this could be translated into sustained growth. Perhaps the connectivity industry is where we should be looking to answer this question.

One thing which has always been missed from laptops is embedded connectivity. Users has become accustomed to signing onto a Wifi connection or tethering a smartphone, but with almost everything and anything having a SIM placed in it nowadays, the laptop seems like one of the most obvious places to do so.

Few people would log onto a laptop today without connecting to the internet, so it begs the question as to why 4G connectivity is not commonplace within these devices today. There may be a couple of reasons:

  • Wifi was a better solution
  • Data was too expensive
  • Data tariffs were not designed in this manner
  • Industry was focused elsewhere
  • Customer demand was not present

There is unlikely to be any one reason, more of a blend of each one, but there are emerging trends which could result in SIM connectivity for laptops.

Firstly, Wifi could have been viewed as a better solution because of patchy coverage. Considered we still complain about 4G coverage today, this is a very real reason, though thanks to pressure from regulators and governments, most developed countries are eradicating not spots.

Secondly, the price of a GB of data varies quite considerably, though this is certainly decreasing as more markets shift towards unlimited bundles. The delivery of 4G connectivity is always becoming more efficient, therefore the transition towards commoditised data tariffs will only continue. This will aid the business case for embedded 4G connectivity in laptops.

Staying with data bundles, more telcos are offering flexible tariffs, allowing customers to purchase ‘data buckets’ for more than one device. If the telcos offer such products, alongside unlimited allowances, this will be another justifying trend to embed SIMs in laptops.

Looking at industry attention, there has always been some directed towards laptop connectivity, but it was almost an afterthought. Intel and Qualcomm has investing more in this area in recent months however. Should the products be on the market, at an affordable price, there might be increased enthusiasm from the likes of HP and Lenovo to produce such products at scale.

Finally, user demand. Wifi and tethering do provide an option for connectivity, but they also do for wearables. Working from home or on the road is becoming increasingly common, a trend which might encourage the adoption of connected PCs.

What is worth noting is that as there is not a silver bullet, it becomes more difficult to become optimistic about the future of SIM connectivity in laptops.

As tethered connectivity is a well-practiced activity, therefore embedding modems in laptops might be the solution for a problem which is not that great. The cost of adding modems has always been an issue for the industry, though there is one area worth is keeping a keen eye on.

In July, Apple announced it was acquiring Intel’s smartphone modem business. This might be so Apple could gain greater control of its iPhone supply chain, though it also presents the opportunity to embed modems into the MacBook.

As embedding the modem into the PC device could be done at a substantially lower cost, and Apple does have a customer base which would be tolerant of a premium placed on devices.

Although the market is not particularly optimistic about the idea of modems in laptops, Apple could change that perception. Apple’s idea to drastically shift mobile devices form factor was originally met with pessimism, but edge-to-edge screens are the norm nowadays. If Apple can prove its customers want to buy products with embedded modems, others will most likely follow.

This is perhaps a trend which could turn the tides of the PC segment permanently. Today’s estimates of growth are encouraging, but you have to question whether it will be a sustained change, after all, the primary driver for new purchases is Windows 10. Should laptop connectivity catch-on, there might well be a refreshment cycle for these devices, especially in the enterprise markets where mobility is being encouraged.

However, it is always worth bearing in mind that users are perfectly happy with the connectivity status quo of today, and the price of the products. The issue is, are connected laptops the solution for a problem which does not actually exist?

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