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Connected Homes February 2021 Viewpoints

Technology Analyst: David Strachan-Olson

Strong PC Sales

Why is this topic significant?

After years of stagnation, the PC industry saw strong growth in 2020 as the covid-19 pandemic pushed individuals to purchase PCs for work, learning, and entertainment.

Description

For almost a decade, the personal-computer (PC) industry has existed in the shadow of the rapidly growing smartphone industry. Since about 2010, desktop and laptop shipments have declined or at best remained stagnant each year. However, 2020 was the year that provided the first major growth for the PC industry in a decade. Multiple market-research firms have reported on this trend, noting that worldwide shipments in 2020 increased by about 11% to 13% year over year. Early in the covid-19 pandemic, Microsoft announced that more than 1 billion active devices were running the Windows 10 operating system. Stakeholders attribute the large increase in shipments to the ongoing pandemic and the rapid rise of remote working and remote learning. However, market analysts mention that PCs have also been playing an increased role in entertainment, as sales of PCs for playing video games reached an all-time high in 2020. Market analysts also noted increased sales of computer accessories such as monitors and web cameras.

Implications

For the past decade, PCs have been an afterthought for many stakeholders thinking about the future of portable electronics and connected homes. Stakeholders' dreams of virtual assistants, Internet of Things devices, and virtual reality fill strategic visions for the connected home, but 2020 proved that current-generation user-facing PCs still have an important place in the future of the connected home. PCs are valuable tools for working, learning, and playing. In particular, gaming on PCs showed especially strong growth in 2020. Valve, owner of the Steam digital storefront for computer games, highlighted this trend in its annual report. Notable figures include 2.6 million new purchasers per month on average for the year and an increase of 50% in the total number of hours played in comparison with 2019.

Impacts/Disruptions

Stakeholders expect sales to remain strong throughout the first half of 2021 as the pandemic continues and social-distancing measures remain in effect. Other ongoing developments—including increased competition between Intel and AMD for supplying computer processors, Apple's designing of custom Arm processors, the growing popularity of computer gaming, and increased integration between smartphones and PCs—might further improve outlooks for the PC industry. In the longer term, if more companies adopt remote-working policies, employees might invest more money in developing permanent home offices centered on a PC. Stakeholders would be wise to consider opportunities for the connected home that arise when a household includes one or more remote workers.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Medium to High

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: Now to 5 Years

Opportunities in the following industry areas:

Desktops, laptops, home offices, video games, computer accessories, broadband services, home networking equipment, cloud/edge computing

Relevant to the following Explorer Technology Areas:

Big Picture: Personal Computers, Productivity, and Home Offices

Why is this topic significant?

PCs are a well-established and important aspect of connected homes. Changes in PC adoption and usage driven by changes in leisure and working behaviors could affect the direction and development of connected homes.

Although stakeholders often consider the personal computer (PC) an afterthought in the modern connected home in comparison with other devices—including smartphones, game consoles, smart TVs, and Internet of Things (IoT) devices—the PC is the forebearer of all these devices and remains an important aspect of connected homes. The first popular application of home networks was the sharing of a broadband connection among two or more PCs. Home networks enabled multiple PCs to share other resources, such as storage devices, printers, scanners, copiers, and multipurpose document-management devices. Similarly, many households purchased Wi-Fi access points initially to simplify connecting a laptop that travels from home to office or home to school. Wi-Fi access points later became multipurpose devices, enabling people to save money on mobile-data plans for smartphones and eventually enabling connected IoT devices.

Although PC sales have declined since 2010, the PC has remained an important part of the connected home, with surveys indicating that more than 75% of US households have at least one desktop or laptop computer. European countries have similar adoption statistics. Households tend to buy PCs for work and school but then often find other applications for them—including social media, communications, video streaming, and video games. In recent years, sales of PCs designed for gaming have become increasingly popular.

Despite the popularity of both smartphones and PCs, the software ecosystems for these devices have remained separated, requiring vendors to make dedicated apps for both types of devices. Cloud services have come to play a central role in performing file, calendar, messaging, and contact synchronization across smartphones and PCs. In recent years, Google, Apple, and Microsoft have taken steps to address the software incompatibilities between smartphones and PCs. Google's Chrome OS laptops can run Android apps, and many iOS apps can run natively on Apple's Arm-based Mac computers. Microsoft and Samsung have partnered to enable users of certain Samsung smartphones to control their devices remotely using Windows 10. The goals of such integrations are to enable users to seamlessly transition between devices such as smartphones and PCs.

The importance of home PCs and home offices became apparent during the covid-19 pandemic. During the pandemic, companies expanded remote-working policies dramatically, and many students transitioned to online learning. Many leading technology companies announced intentions to make remote-working allowances permanent. Potentially, a remote-working transformation could result in a society that is much more geographically dispersed and centered much more on home life. Such transformations would have dramatic implications for home offices and many other aspects of the connected home. Remote workers and their employers would likely seek out solutions to improve the productivity and experience of remote work; such solutions could range from external monitors to symmetric broadband services to virtual- and augmented-reality headsets for remote collaboration.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Medium to High

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: 5 Years to 10 Years

Opportunities in the following industry areas:

Desktops, laptops, home offices, video games, computer accessories, broadband services, home networking equipment, cloud/edge computing

Relevant to the following Explorer Technology Areas: