PC Sales Decline Last Fiscal Quarter Was the Worst in Recorded History: Is Windows 8 to Blame?

We know PC sales have been declining for several years. And we even know the main culprits: in most of the world the mobile phone has supplanted the PC due to its lower cost, mobility and enhanced functionality. In somewhat tonier precincts the tablet is catching on and also cutting into PC sales.

But worst decline in recorded history? That is about as definitive as it gets.

Now, when it comes to PC sales, recorded history starts in 1994 so we're not exactly in 'demise of the dinosaurs' territory but for technology, this is a useful benchmark.

What makes this report particularly piquant is that the blame this time is being directed squarely at Microsoft's Windows 8. Unfair? Inaccurate? We shall see.

But the evidence suggests that Microsoft's engineers and designers may have over-thought their mission to revive the Windows franchise. They evidently decided that redesigning the wildly successful - and dominant - user interface with which two generations of most of the world's computer users had grown up could stand some re-imagining. And they not unreasonably concluded that given the popularity of the mobile phone, changing the PC screen presentation to look and operate like that of a phone made perfect sense. Convergence! Anticipating the customer's desires! Eureka! Except, alas, that what they appear to have actually done is confuse, off-put and retard demand for the very product they had hoped to save.

There is a rich history of business engineers, marketers and assorted suits getting this new product development and redesign thing woefully, comically wrong. We suspect, however, that those in Bellevue, WA never imagined their product would one day be mentioned in the same breath as the Edsel and New Coke. JL

Julianne Pepitone reports in CNN/Money:

Shipments of PCs fell 14% worldwide last quarter, according to IDC. It was the worst yearly decline since IDC began tracking the data in 1994.
The drop in PC shipments was nearly twice as bad as the 7.7% decline IDC expected, and it marked the fourth consecutive quarter in which PC shipments fell year-over-year.
Gartner, another technology consultancy, posted similar figures on Wednesday. The analysis firm said 79 million PCs were shipped worldwide in the first quarter -- the fewest number of shipments since the second quarter of 2009.
PC industry titans have tried to innovate themselves out of their sales slump, but recent attempts have failed. Ultrabooks, super-thin notebook computers, debuted to great fanfare in 2011. But sales disappointed, and firms quickly slashed their ultrabook sales forecasts.
In October 2012, Microsoft (MSFT, Fortune 500) debuted Windows 8, which received mixed reviews, and sales have been muted compared with past Windows launches.
Bob O'Donnell, a vice president at IDC, said in the company's report that "the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market."
He slammed WIndows 8's "radical changes" to the user interface, particularly the removal of the iconic start button, and intimated that the switch is confusing for customers.
"Microsoft will have to make some very tough decisions moving forward if it wants to help reinvigorate the PC market," O'Donnell said in the report.
Microsoft and its rivals felt the crunch in after-hours trading. Microsoft's shares fell 1.3%, while Intel (INTC, Fortune 500) and Hewlett-Packard (HPQ, Fortune 500) were down about 1.7%. Dell (DELL, Fortune 500), which is planning to go private after a dismal few quarters, remained flat.