More proof of mobile devices trumping PCs is in the sales

If anyone doubts that mobile devices are triumphing over desktop personal computers, the evidence has grown even more compelling.

Research firm Strategic Analytics said earlier this week that a record 1.4 billion mobile units were sold last year, up 12 per cent from 2014.

Most of the gains came from vast emerging markets such as China and nations across Africa.

Android phones made by Samsung and other vendors were dominant, with 82 per cent of global market share. Apple came a distant second while Microsoft Windows phones trailed in the low single digits.

If the cash registers are ringing for smartphone vendors, the same cannot be said for PC makers who are hurting even more. Research firm Gartner said PC sales declined 8 per cent last year, continuing the downward trend of the last three years. In Singapore, PC sales last year slid by less - 0.9 per cent, said Gartner principal analyst Lilian Tay.

Local PC retailer Challenger saw this declining trend and swiftly changed strategy. Challenger is the oldest and largest IT retailer in Singapore, with about 40 stores here.

Chief executive Loo Leong Thye has boosted shelf space for smartphones and accessories in the last three years, and set up speciality areas for gaming and printing.

He also created in-house brand Valore, which has over 200 products like smartphone casings, hard disks and different types of cables.

Said Mr Loo: "Last year the telcos were giving away free mobile phones. Prices of mobile phones were also dropping to about $99. We can't compete on price, so we moved to experiential selling."

Its speciality areas have sales executives who know the gadgets and products and are able to make recommendations.

He paid attention to design for the Valore brand, ensuring that the latest products sported the latest looks at good prices.

Challenger continues to sell PCs in a smaller section in its stores.

Gartner's Ms Tay said smartphones and tablets have triumphed over PCs because they are more convenient to use to access the Internet. "They are handy, convenient to use and often one click away from people's e-mail and Internet accounts," said Ms Tay, who is based in Singapore.

There has also been a consolidation of vendors. PC makers, including those who make notebooks like Sony, have exited the market. "Fujitsu and Toshiba are getting out of the retail market to focus on corporate sales," she said.

Profit margins are also being squeezed to about 4 to 5 per cent. Competition from Internet-enabled notebooks like Chrome notebooks, which cost about US$300 (S$420), are also squeezing out the mainstream notebooks.

To get better profit margins, vendors are going upmarket with better-designed notebooks. "The trend is to make notebooks in the high end with better-designed and more powerful devices. The focus is also on purpose-built machines aimed for the imaging, storage and gaming markets," said Ms Tay.

Consumer behaviour has also changed. Fewer people are replacing their desktop PCs. The three- year replacement cycles are now lengthening to five years.

Said Ms Tay: "There are not many killer apps that can be used on desktop PCs. So unless you're into gaming or high-end imaging, you're unlikely to change your PC."

The outlook for PC sales is not good either. Sales will shrink again by at least by 1 per cent this year, she added.

A version of this article appeared in the print edition of The Straits Times on February 06, 2016, with the headline 'More proof of mobile devices trumping PCs is in the sales'. Print Edition | Subscribe