Desktop Sales Skyrocket, ASPs Rise

Desktop Sales Skyrocket, ASPs Rise

The NPD Group released a statement today that points toward surprising growth in desktop sales this past February. Historically, desktop sales have trended steadily downwards for the past ten years; notebook shipments first surpassed desktop shipments in 2008. New data suggests the pendulum has oddly swung the other way—desktop unit sales were up 30 percent in February, while desktop-derived revenue grew by 33 percent.

Part of what makes the jump odd is that there doesn't seem to be a reason for it. Our first thought was that OEMs like Dell and HP could have slashed prices on their Core 2 Duo desktops to make way for the Core i3/i5 products Intel launched in January, but desktop ASPs were actually 11 percent higher ($670) than their notebook counterparts ($602.) NPD's vice president of strategic analysis, Stephen Baker, attributes this growth to Windows 7, writing: "Windows 7 is propelling the PC side of the market where desktop ASPs have been higher than notebook/netbook ASPs in three of the last four months."

Baker attributes the growth in desktop ASPs to the success of low-cost notebooks and netbooks, which have replaced desktops as entry-level systems for first-time buyers. "With consistent offerings under $400, partly in response to the netbook challenge and partly in response to competitive activity in the industry, notebooks now make up the lion’s share (64 percent of the non-netbook under $400 PC market in the six months ending Feb 2010 and one-third of the 4.4 million computers sold at retail for less then $400 in that time...in February notebooks under
$400 nearly outsold netbooks." If Baker is right, it implies that the line between notebook and netbook is getting quite blurry around the $300-$400 mark.


Dell's new Inspiron Zino. Could be selling well, but NPD doesn't break out the nettop market.

Given the fact that a majority of US households own a computer and have access to the Internet, it makes sense that 'first time' buyers, especially students, would gravitate towards a mobile system rather than a second desktop. We're not as willing to tie Windows 7 and desktop unit sales together. Historically, no Microsoft OS since Windows 95 has created a sustained uptick in PC sales. A number of analysts predicted a pent-up demand for Win 7, but we'd have expected that boost to mostly appear in the fourth quarter of 2009. The economic conditions of the past 18 months also make us leery of drawing monocausal conclusions—things may be improving, but they're scarcely wine and roses for a lot of people.

NPD rosily predicts "solid ASPs, better demand, and a strong upgrade path...2010 is likely to see the best growth rates for consumer desktops in years." We're all great fans of desktops here, but given how badly PC sales slumped in early 2009, we're not convinced that the February jump is more than a blip. Desktop revenues have grown in three of the past four months after 21 months of decline—we'll wait for a few more months of economic stability before concluding that desktops are experiencing a sort-of renaissance.
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Interesting. It's no secret that computer hardware is getting cheaper and cheaper than in the past. I remember when having a "high end" gaming PC was unheard of for under a few grand. These days you can piece a pretty amazing desktop for less than a grand for gaming, and for simple media PCs half of that. Perhaps that, and the continued influx of "computer literate" people play a factor?

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Hum really? They decide to buy a desktop that's a bit more expansive then in the past now? Lol, then again Maybe it is because of windows 7 but they could get a laptop too :)

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Inspector:

Hum really? They decide to buy a desktop that's a bit more expansive then in the past now? Lol, then again Maybe it is because of windows 7 but they could get a laptop too :)

 

Seriously. It can't be because of Windows 7. That should help laptop sales more than anything. If not, then it is because a lot of people just bought an OEM or retail copy of Windows 7 to upgrade. Would have to look at Windows 7 sales divided into different categories to get a more accurate picture of Windows 7's impact on desktop sales.

 

Maybe there was just a simple error in the reporting. Seems more plausible to me than attributing it to Windows 7.

 

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Ryu,

When you charge people $10K for a report you don't get to make those kind of mistakes (referring to an error in reporting). On the other hand, since NPD gets paid $10K for a report and I don't, I'm not going to *say* it's not Win 7. I'm still leaning towards a blip in sales or companies clearing inventory. If the trend holds through March, I'll be more convinced.

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Joel H:

Ryu,

When you charge people $10K for a report you don't get to make those kind of mistakes (referring to an error in reporting). On the other hand, since NPD gets paid $10K for a report and I don't, I'm not going to *say* it's not Win 7. I'm still leaning towards a blip in sales or companies clearing inventory. If the trend holds through March, I'll be more convinced.

 

30% growth is a huge number, especially for desktops. I didn't mean to say that it was a straight up error. It just sounds more plausible than Windows 7.

I agree, it probably is because of companies clearing the inventory.

 

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I don't think its companies trying to clear their inventory as the article says the price actually raised :(

I really want to know why the sales raised by 30%

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Joel H:

Ryu,

When you charge people $10K for a report you don't get to make those kind of mistakes (referring to an error in reporting). On the other hand, since NPD gets paid $10K for a report and I don't, I'm not going to *say* it's not Win 7. I'm still leaning towards a blip in sales or companies clearing inventory. If the trend holds through March, I'll be more convinced.

By the way, people still can make mistakes. Even if they are paid a lot.

http://www.firingsquad.com/news/newsarticle.asp?searchid=19278

 

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Netbooks will soon lose their novelty. many companies have tried this small desktop thing in the past.

they have never been really successful. Although they are good for size and offices that need to save space. They are not very upgradeable, and most people like to add a little power now and then.

Even Apple has not had promising numbers with their small bow computers. now we are seeing that for the novelty the Apples with everything built into the monitors are doing very well towards those markets such as offices requiring limited space and minimum performance.

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The desktop is clearly not dead. Yea Laptops are convenient for school or being mobile but the raw power of a desktop cannot be replicated. To the laptops credit they are getting faster and when SSD's are installed that will make them even snappier, but make no mistake about it the desktop will not be replaced for many, many, years,,if ever.

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I don't think the desktop will ever die. We have one computer right now in the house. I think that is the thing to consumers. Having at least one main computer at home is the best thing to me. Laptops are generally slower even if just a little bit, have much less room on them in general, and if something goes wrong you can't really do anything about it.

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Maybe the increase is because of their main home computes are all dieing out and they need this new one which can kinda explain for the increase :)

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