PC manufacturers set to get market share back by making hybrids

Posted on Jan 16 2013 - 8:02pm by Harvey

ideapad-yoga-11-006_large_verge_medium_landscapeIn an effort, they think would check the decline of their sales, personal computer manufacturers are making a last-ditch move to convince the market that PCs are still around by following their rivals’ lead.

According to analysts, many of the laptops set to be launched in the next few months will “convertibles” or hybrids–machines that can work either as tablets or laptops with a full keyboard.

The said hybrids comes as the two leading pillars of the PC industry, Microsoft Corp and Intel, prepare their reports of results in the next couple of weeks. Wall Street is not expecting a positive report for both companies though, highlighting the trend of the current pc industry which has failed to innovate.

But this year, some analysts expect that this will change.

The release of Microsoft’s Windows 8 operating system, which focuses on touch screen technology and departure from its traditional previous operating systems, as well as the creation of power efficient chips from Intel, PC makers are trying to revive a spark of growth for the industry. They are now making slim laptops featuring touchscreen technology and vice versa.

As a former software powerhouse, Microsoft has broken its tradition by venturing out to make its own hardware, resulting to the release of “Surface Pro” tablet that is also compatible with legacy PC software that has been in development for decades.

The new move is a significant selling point for corporate clients like  SAP, a German business software maker, which disclosed a plan to buy Surface Pros for employees who will be interested in it, according to SAP Chief Information Officer Oliver Bussman.

Bussman said, “The hybrid model is very compelling for a lot of users. The iPad is not replacing the laptop. It’s hard to create content. That’s the niche that Microsoft is going after. The Surface can fill that gap.”

The entry of Apple’s iPad in 2010 saw a sharp slow down in PC sales around the world. The assault was reinforced by the release of Amazon.com’s Kindle Fire and other rivals including the popular Samsung Galaxy Note series.

Sales of personal computers last year dropped for the first time since 2001. now analysts are expecting that this year may bring in a reinvigorated sales performance as makers focus on better design as well as innovation, instead of concentrating research and development in reducing costs at the expense of adding new features.

“People used to be able to just show up at the party and do well just because the market was going up. It’s harder now. You can’t just show up at the party. You have to innovate and have something special, ” said Lisa Su, a senior vice president from Advanced Micro Devices. Her company is a rival of Intel.

The Consumer Electronics Show in Las Vegas last week revealed the current thinking of pc makers–to bet more on hybrids or convertible laptops.

Gerry Smith, the President for North America operation told Reuters last week that the company’s “Yoga”, a hybrid featuring a screen that flips back at the back of the keyboard, “ThinkPad Twist”, also a lightweight hybrid with a swiveling screen are a hit to him.

Intel’s own hybrid version called “North Cape” features a thin tablet screen that allows an attachable magnetic keyboard. ASUS showed off a big 18-inch all-around Windows 8 PC that morphs into a tablet that runs Google’s Android operating system.

Both ASUS and Lenovo, who have won positive praise because of their innovative products during the past few months, saw increases in their PC shipment last year, Gartner said.

Chief financial officer of Windows unit of Microsoft Corp, Tami Reller, said, “The number of unique systems that our partners have developed for Windows has almost doubled since launch. That gives an indication of how much innovation is going into the PC market.”

Hybrids or convertible laptops are recent innovations and for sure, consumers are yet to know the benefits of such products.

Initial attempts by traditional pc makers to sway consumer interest away from Apple’s tablets have had small success.  Spurred by Intel, pc makers launched new lines of laptops last year that featured solid-state memory popular with tablets. However, the venture failed as the products were too expensive at $1,000 per unit. The move failed to stop the decline of pc sales.

The release of Microsoft’s Windows 8 operating system last October, hoped to spark consumer interest in PCs, failed to meet expectations.  A finger-pointing round ensued as chip and PC executives blamed a shortage of touch screen components, while  others claiming that pc makers did not anticipate the huge demand of consumers for touch gadgets.

Whatever happened in the background, analysts believe now that the PC industry is equipped to deal with the solution this year.  IDC analyst David Daoud said that almost 50 percent of laptops running Windows this year are touch screen capable and most of them are the convertible type. He also noted that about a quarter of soon-to-be-released Windows 8 devices will be tablets that can readily take on the role of a laptop with the help of a keyboard.

These new products will be available during the second half of the year, according to Daoud.

“The most likely scenario today is for the industry to have these products ready for the back-to-school season,” Daoud added.

source: reuters

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