PC sales will rise again, predicts Intel, but tablets are toast

ICGS The last few years haven't been good for the PC market as the old upgrade cycle died and buyers piled into tablets and smartphones. But Intel is convinced the PC will rise again, thanks to new hardware and form factors.

"I honestly feel this is a once in a decade moment," enthused Kirk Skaugen, GM of Intel's client computing group during his keynote at the Intel Capital Global Summit this week.

"Today there are more than a billion PCs that are more than three years old and a third of a billion that are over five years old. People are swinging back to the PC and are refreshing their systems."

It used to be the case that people upgraded their PCs every two years or so, but in the last five years silicon has got so powerful that no one saw the need. They still don't, but Skaugen is betting that new form factors, particularly the two-in-one detachable-screen systems, will be a major growth driver.

Sales of two-in-one systems are up 150 per cent, he claimed, and are leading to people wanting to refresh their PCs up to 18 months earlier than they would have. The new form factors – including mini-computers – are also inspiring companies that haven't been big in laptops to get in the game he said, citing Microsoft's Surface Book and InFocus' $99 Kangaroo PC as examples.

Without the growth in two-in-ones, the laptop market in the US would have shown 4 per cent negative growth, Skaugen said, but the new designs have bumped that up to 1 per cent growth. The new hardware that such systems are starting to carry, particularly 3D cameras, is also going to have people rushing back to laptops, he opined.

In the next few weeks both HP and Lenovo are going to be releasing laptops with 3D cameras built into the lid, and Intel has been working with Microsoft to make them integral to the Windows 10 Hello biometric security system. The camera scans the user's face and then opens the operating system, and Intel hopes the system will also replace password logins for websites.

Traditionally facial recognition has been relatively easy to fool – just holding up a picture of a face worked often – but Skaugen said the new cameras make this impossible. They take 270-degree scans of the user and have an IR component to make sure that a warm human is in its view.

"This camera is so sensitive that we used it to differentiate between identical twins and the system got the right one," Skaugen explained.

The camera can also be used to personalize games, mapping the player's face and body into player characters. Skaugen said that Intel has been working with Electronic Arts to add this into games, and the early results are looking very good.

In China, Tencent is also adding the technology to dating sites to eliminate the nasty shock of meeting someone who looks nothing like their photo. Skaugen joked that startups should start building profile editing software.

All of this is for laptops, but desktop systems are also going to rise again, Skaugen predicted, with gamers driving growth. Gamers typically refresh their systems every two years, compared to nearly six for standard desktop users.

The big loser in all of this is going to be the tablet market, Skaugen said. Intel had got the growth in tablets wrong, he said, and is now revising its forecasts.

"18 months ago many people thought that tablet sales were going to cross over PCs in 2014; now we're sure they won't ever," Skaugen said. "At Intel we've taken a billion units out of our forecasts in the last year." ®