Smartphones Out Ship PCs

If you are wondering why Microsoft is trying to hard to crack into the smartphone market, here is the reason: according to IDC in the fourth quarter of 2010 a little more than 100 million smartphones shipped from manufacturers and during that same time 92 million PCs shipped. Shipments of smartphones increased year-over-year by 87% while PCs only increased 2.7%.

Keep in mind that the majority of Microsoft’s sales is to hardware manufacturers who include Windows on their computers. Consequently, a decrease in shipments of PCs is also a decrease is sales of Windows, and therefore PCs are a shrinking market for Microsoft. To continue growing Microsoft needs to get their software on the hardware that is growing, and as the numbers show, that hardware at the moment is smartphones.

IDC’s numbers are also an indication why so many hardware companies are entering the mobile market. Companies that currently rely heavily on PC sales are seeing that market decreasing, so they need to fill that void. Consequently, Dell and HP both need to see sales of PC alternates, whether they are smartphones or tablets, increase in order to continue growing at the pace at which they are accustomed to.