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Everything you read about Dell and the death of the PC is wrong

The recent news that Dell is to make 6,650 staff redundant (about 5% of its workforce) led to predictable blame being heaped on that old political football, the IBM-compatible Personal Computer. The notion perpetuated implicitly in media coverage was that PC sales are falling ergo Dell is falling: a not-so-subtle variation of another not-quite-true perception that when America sneezes, the world catches a cold. This rank-bad logic sheds little light on either what’s happening at Dell or what’s happening to the PC.

Now into its 43rd year, the PC has seemingly always been a magnet for negativity. IBM itself has often been prominent among naysayers. Released in 1981, the device itself was a relatively low-key punt at an affordable computer but it smashed through all hopes of sales, apps and aftermarket add-ons. More than 20 years ago, then IBM CEO Lou Gerstner said that “the PC era is over” and the deal was sealed when IBM sold its PC business unit Lenovo in 2004.

But, to combine two cliches for the price of one, the truth is rarely pure and never simple, and rumours of the PC’s death have long been overstated.

The death of the PC? Not so fast...

What’s happening is this. PC sales are going through an odd time. They soared during pandemic lockdowns as companies equipped staff to work from home… and then came a bounceback and a return to something like order. And yes, PCs have long been affected by impinging sectors such as tablets, phablets and smartphones. But even in this current nadir they still represent over 67 million devices for the last quarter. They remain very useful, highly affordable products and they are going nowhere fast, despite clear and current headwinds.

IDC’s take on what’s occurring in PCs is excellent. The analyst recently noted this:

“The 4Q22 shipments are comparable to the fourth quarter of 2018, when the market was constrained by Intel's supply challenges. It is clear the pandemic boom is over for the PC market, but despite recent declines, annual shipments for 2022 were well above pre-pandemic levels [my italics]at 292.3 million units for the full year.”

So what’s happening here is a correction, an organic reaction to a previous demand surge.

And Ryan Reith of IDC even puts a positive spin on things: "Consecutive quarters of declines clearly paint a gloomy picture of the PC market, but this is really all about perception. 2021 was near historic levels for PC shipments, so any comparison is going to be distorted. There’s no question when we look back at this time that the rise and fall of the PC market will be one for the record books, but plenty of opportunity still lies ahead. We firmly believe the market has the potential to recover in 2024 and we also see pockets of opportunity throughout the remainder of 2023."

Add in a Windows 10 huge base about to enter the valley of doom (or at least end of support) and there are reasons to be cheerful for the PC brigade.

Now also consider Dell. It’s exceptionally lazy thinking to consider its fortunes as explicitly linked to those of the PC when in 2015 it agreed a deal to pull off one of the most audacious business tech combinations in history by pairing with EMC to become perhaps the leading IT server/storage/services/software/security one-stop-shop. In part, this was Michael Dell recognising that the PC which (literally) made his name was no longer a cash cow. And indeed, even before EMC, the company was making a huge effort to build its higher-margin server and storage businesses. But PC sales open the door for these.

As The Stack has noted, this is a season of culling. This is Dell’s turn to cut its cloth for an unpropitious market, but it’s far from a sign of the death of the PC or of a sea change in how we use computers.