Tablets are ‘crashing’, PC business is ‘reviving’ – chief exec of Best Buy

In the recent years it became common for high-technology industry leaders to complain about slow PC sales and praise booming sales of tablets and smartphones. Apparently, the situation changed drastically in the recent months. After Microsoft ceased to support its Windows XP operating system, not only enterprises, but also consumers started to get new PCs. Since many people buy new PCs now, they do not spend on tablets.

Hubert Joly, chief executive officer of BestBuy retail chain in the U.S., said in an interview with Recode.net that the market of PCs and tablets has changed a lot this year. Smartphones with large screens as well as 2-in-1 hybrid devices compete against tablets nowadays. In addition, users need new personal computers now that the Windows XP operating system is no longer supported and older PCs simply get too outdated even for not-demanding users.

“The tablets boomed and now are crashing,” said Mr. Joly. “The volume has really gone down in the last several months. But I think the laptop has something of a revival because it’s becoming more versatile. So, with the two-in-ones, you have the opportunity to have both a tablet and laptop, and that’s appealing to students in particular. […] Some of us have a phone and a tablet and a laptop, but many people can now converge to either a tablet and a phone or a phone and a laptop.”

This does not mean that sales of tablets will remain on low levels. People need to replace their old slates with something, so once a breakthrough tablet arrives, it will become popular.

“Once you have a tablet of a certain generation, it’s not clear that you have to move on to the next generation,” said the chief executive of BestBuy. “I think replacement is the issue. The penetration has gone so fast that it’s reaching an amazing degree and therefore it becomes more of a replacement market, and the level of innovation in the past year has not been as great as it had been in the previous two years.”

Hubert Joly is not the first person who talks about improvements of PC sales in the recent months. Intel Corp. and some executives from computer makers have expressed their optimism regarding personal computers too. While it is likely that PC shipments will be good this year, it remains to be seen how good will they be in a couple of quarters from now and whether demand for personal computers will actually remain on high levels in the future.

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KitGuru Says: It will be interesting to see what ways PC makers (and software designers [read: Microsoft]) will choose to ensure sustained demand for PCs. Tablets and smartphones from Apple are supported for three years (and three OS iterations) since their initial release, which increases likelihood that they will be replaced in three to four years. Perhaps, something like that will be adopted in the PC/Windows world?

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