World PC sales decline and prospects

According to IDC latest data declines continue for the world PC market. IDC noted that “Cooling demand and uneven supply have contributed to a year-over-year contraction of 15.0%”. Preliminary Q3 results are listed in the table below:

 

Top 5 Companies, Worldwide Traditional PC Shipments, Market Share, and Year-Over-Year Growth, Q3 2022 (Preliminary results, shipments are in thousands of units)

Company

3Q22 Shipments

3Q22 Market Share

3Q21 Shipments

3Q21 Market Share

3Q22/3Q21 Growth

1. Lenovo

16,880

22.7%

20,129

23.1%

-16.1%

2. HP Inc.

12,706

17.1%

17,603

20.2%

-27.8%

3. Dell Technologies

11,963

16.1%

15,184

17.4%

-21.2%

4. Apple

10,060

13.5%

7,174

8.2%

40.2%

5. ASUS

5,540

7.5%

6,011

6.9%

-7.8%

Others

17,103

23.0%

21,218

24.3%

-19.4%

Total

74,252

100.0%

87,319

100.0%

-15.0%

Source: IDC Quarterly Personal Computing Device Tracker, October 10, 2022

Traditional PCs include Desktops, Notebooks, and Workstations and do not include Tablets or x86 Servers.

 

Even though the values may seem utterly discouraging, in my understanding everything is not as bad. There are certain facts to be taken into consideration:

  1. The pandemic has led to global remote employment mode. Businesses have been buying additional PCs in volumes to provide the employees with the possibility to work from home. That has created the effect of the high base of the previous period we are facing now.
  2. The electronic components shortage during the pandemic along with increased delivery costs had led to PC price hikes, which in its turn has caused the purchasing ability decline.
  3. Unstable global political situation, local conflicts including war in Ukraine, has also added uncertainty in purchasing policies and caused postponing the decisions to buy.
  4. Governments slowing down in purchase to help decrease the inflation.
  5. Interest rates are up, series affects in many industries.

 

No doubt, analysts may find other explanations, but the ones I’ve mentioned are sufficient to comprehend that’s nothing critical has happened and that we must live with that.

We do not observe noticeable demand decline in our market niche of small form factor industrial grade computers. Likely this is due to some inertia of industrial computer market segment.

We consider this situation a great opportunity for us because production and auxiliary processes cannot wait. There are certain problems the businesses are facing, which create the demand. Our goal is very simple – just to meet this demand.

Having said this I, of course. keep in mind our certain advantages in the market. Just to name a few:

  1. Specialising in the development and production of embedded and mini PCs for many years. Extensive experience. Huge installed base.
  2. Industrial grade components are used, ensuring high reliability and many years of continuous operation.
  3. A MTBF of 100,000 hours, which is the same as that of an industrial grade system, is publicly available. Other PC manufacturers do not usually publish this figure.
  4. Our mini PCs have environmental resistance ratings (climatic, mechanical) which correspond to industrial-grade systems.
  5. We build embedded mini PCs with 15 years of longevity product life, which is significantly longer than that of Tier 1 manufacturers’ products.
  6. Software development for projects requiring embedded mini-PCs can cost millions of dollars. Therefore, customers are looking for products that can be available for a long product cycle to reduce their engineering cost to rewrite the software and validate it again and again. Most new hardware is not backwards compatible with older operating systems and legacy software. For example, none of the newer generations (after 7th generation) of Intel Core i5 CPU support Windows 7 or 32-bit Windows 10 or Linux 16.04 (2016 or older). New 12th generation Intel Core processors can only support Windows 11 and will not be optimised for Windows 10, which can only run in emulation mode with new hardware, which means it will be slower than older hardware. We meet this demand with our longevity products.
  7. Each product we build is aimed at specific applications such as Digital Signage, data kiosks, POS, AI, Edge, IoT, Smart Manufacturing, video processing, visual computing, GPU computing, etc. Therefore, in a particular application, they are significantly more efficient than Tier 1 manufacturers’ PCs, which tend to be generic.
  8. Many projects require special hardware features such as Multi-LAN, Multi-Display, Multi-COM, expansion slot to install special additional cards such as video capture cards, robot control, motion control, AI computing cards, etc. We have many such systems at a time when the major PC manufacturers usually don’t offer such special features.
  9. Certain models are available with 15 video outputs, 6 COM ports, 10 USB ports and 8 network ports. USB ports with overvoltage to power special peripheral devices are supported.
  10. Many Polywell Computers models are produced in fanless chassis, which ensures quiet operation and low power consumption. In some cases (dusty environments), the use of fan-cooled PCs is simply unacceptable.
  11. Several models are equipped with 4G and 5G modules for off-line access to the Internet, or a private enterprise Internet of Things (IoT) network.
  12. We are one of the few manufacturers in the world that can provide fault-tolerant, continuous 365x7x24 operation of Android PCs.
  13. As a hardware manufacturer we can customize firmware, develop device drivers, optimize OS kernel, provide lifelong support for hardware.
  14. We provide Windows, Linux, and Android support for our mini PCs. The use of Linux and Android enables a significant reduction of purchasing hardware costs.
  15. We ship our devices with a Windows IoT OS, which is specifically optimised for embedded and industrial PCs.
  16. Our systems are approved and recommended for use as content players by many of the world’s Digital Signage service providers: Onsign TV, Novisign, Telelogos, Navori and others.
  17. We offer attractive pricing. In fact, you get industrial grade systems at commercial grade prices. Such an offer is unique in the market.
  18. Some of our industrial mini-PC models have an extended temperature range from -20°C to +60°C. These can be used outdoors, for example in DOOH (Digital out of Home) applications. This means that operating costs can be significantly reduced by using similar models in different environments.
  19. Certain PCs have an integrated battery that lasts for up to an hour in case of power failure.
  20. We have invented the whole new class of swappable industrial computers – SwapPC.
  21. A range of our mini PCs has been specially optimised for the latest AI and machine learning technologies like the Intel Movidius visual processors with OpenVINO software is also available.
  22. Several models have integrated Nvidia GPUs.
  23. Many of our PC models can be powered by PoE (Power over Ethernet), which saves on network installation and maintenance costs.

We’re going to utilize our advantages to increase our market share. Previously we concentrated on the Americas mostly. But now we have a firm intention to expand in EMEA and Central Asia Regions. We are currently building our distribution and sales channels relying on strong local partners in these countries.

Another challenge for the industry and us as its part is the launch of the 13th generation of Intel Core processors. This new generation brings a new level of performance based on cutting-edge technology. I strongly recommend to get familiar with the new CPUs – 13th Gen Intel® Core™ Desktop Processor Product Brief. They will define the industry development for the next few years. Our job will be to integrate the newest technology in our products, preserving the main advantages of or SFF PCs.

We have already launched 13th generation systems – see Z790L2 – eu.polywell.com. There’s more to come.

 

Talk to you soon.

Take care.

Sam

 

Literature:

“Worldwide PC Shipments Decline Another 15.0% in the Third Quarter of 2022, According to IDC Tracker” – https://www.idc.com/getdoc.jsp?containerId=prUS49755822

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