SAN FRANCISCO (Reuters) - Holiday season sales of personal computers fell for the first time in more than five years, according to industry tracker IDC, as Microsoft Corp's Windows 8 failed to excite buyers and many opted for tablet devices and powerful smartphones instead.
"That's in line to slightly worse than expected. There are multiple factors causing stagnation in the PC market.
"There's been an elongation of the replacement cycle from once every five years to once every 10 years. Historically, about 20 percent of the installed base comes up for refresh every year. Now it's 10 percent.
"There's a lack of compelling reasons to upgrade. Increases in performance have been smaller and there are fewer new applications that require more computing horsepower. In developing markets, the first purchase is not a PC, it's a smartphone, especially in markets where literacy levels are low.
"Then, not least of all, there's the incursion of tablets in the PC market.
"There are no clear compelling product cycles coming in the PC market. What could potentially resuscitate the PC market? Ultrabooks could come down in price to the level of regular laptops: $500 instead of $999. But we may be looking at low single digit growth in the PC market for some time."
"Looking at the data from the past few months, I don't think anybody is going to be terribly surprised by these numbers. A lot of people were expecting shipments in the 90 million range.
"I just came from CES and meetings with Intel and Dell. The sense is that until Windows 8 is fully installed and prices start to come down, we will be in this state of negative dynamics in the PC market. I do think that this will lift this year as Windows XP loses support from Microsoft."
Reporting By Gerry Shih and Alistair Barr