There was an interesting interview recently on Re/code with Best Buy CEO, Hubert Joly. Joly says all the right things about Best Buy and also had some insights on the PC and tablet market. Highlights on the latter:
- PCs are experiencing a revival, partly due to no more Windows XP support
- Tablet sales are “crashing” and now a replacement market
- Hybrid 2-in-1s are competitive with tablets
- PC prices have declined a lot
My hypothesis based on the above is this — the tablet market is about light computing needs and those needs have been mostly addressed. What do people use tablets for? Browsing the Internet, reading books, watching movies, playing casual games and perhaps a bit of emailing. An iPad 2 is sufficiently adequate for those requirements; there’s no pressing need to get an iPad Air. We often talk about Chromebooks being good enough; so are the earliest iPads and most Android tablets. Perhaps the only reason to upgrade is to play the latest 3D games but that is more niche than mass market.
Add it all up, and people with tablets are in no hurry to get another. We saw explosive growth because tablets initially fulfilled an unmet need; but now that need is mostly met, growth is levelling off.
Hybrid 2-in-1s have also taken some of the sheen off tablets. If you are in the market for a new computing device, 2-in-1s can represent a compelling cost saving. If what you’re looking for in a tablet is really as simple as browsing, reading and playing casual games, a deficient Windows app store is not a big deterrent. Instead, the productivity possible from hybrid 2-in-1s become a major draw. Snobby technorati often can’t understand why “normals” would buy a hybrid that is a so-so laptop and a below-average tablet instead of a great laptop and a great tablet. The answer is that most people would rather spend money on nightlife, fashion and cars than gadgets.
The theory that PC sales increased because Microsoft retired support for Windows XP is interesting. If tablets have replaced some of the usage traditionally occupied by PCs, shouldn’t the Windows XP factor drive customers to buy more tablets? Instead, according to Joly, those customers are purchasing PCs.
This suggests there is life yet in the PC market.