Services are becoming critical to protecting revenue and profit in a PC market where hardware sales will be largely flat through 2020 due to weaker demand, lower ASPs and longer PC life cycles.
Over the next year, Technology Business Research claims PC vendors will focus on boosting PC customer loyalty and profit growth that relies on beyond-the-box services to protect their margins, and then improve the profitability of their PC business by expanding their services portfolios.
“PC services will help PC vendors transform transactional PC sales into longer-term - and more profitable - engagements with customers over the device’s life cycle,” says Jack Narcotta, Research Analyst, TBR.
“Add-on extended warranties or technical support contracts are not enough to slow PC profit declines, especially as ASPs and unit shipments continue to decline globally. Including inventory management, life cycle planning or predictive maintenance programs as a key component of the PC sale equips PC vendors with the tools to reap additional revenue and profit over the life cycle of each PC.”
Narcotta says PC-as-a-Service (PCaaS) programs implemented by HP as well as expanded portfolios of pre- and post-sales PC services for consumers and enterprises from Dell via Premier Support and ProSupport Plus provide insight into how leading PC vendors will alter their approaches to PC sales in 2016.
“PCaaS is a customised bundle of PC hardware, software and services available for a monthly fee over a period of two to three years,” Narcotta adds.
“It reduces customers’ objections to higher-priced ASPs, as the purchase price is spread out over a period of time. It also accelerates and injects predictably into the PC refresh cycle, which is growing longer as PCs become more reliable.”
Narcotta says Dell aims to leverage its deeper roster of support services to boost customer loyalty over the PC life cycle to protect is install base and entice users to switch brands - key strategies in a PC market where consolidation invites stronger competition between HP Inc. and Dell.