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Light at the end of the tunnel after gloomy year for PC sales

09 Oct 15

While doom and gloom abounds in the latest PC shipment figures, both Gartner and IDC say there is optimism for the future.

Gartner’s preliminary global PC shipments results for the third quarter show a 7.7% year on year decline to 73.7 million, with desktop PCs continuing to show weakness with high-single-digit decline, while the segment that combines notebook PCs and premium ultramobiles, such as the MacBook Air and Microsoft Surface Pro, recorded a low-single-digit decline.

IDC meanwhile, says worldwide PC shipments declined 10.8% to 71.0 million units – a slightly worse decline than the 9.2% decline the analyst firm had projected.

The news for Asia Pacific was better, with Gartner recording a 1.7% decline to 26.3 million units, with mobile PC shipments growing 2.2%, while desk-based PC shipments declined 4.9%.

IDC says Asia Pacific, excluding Japan, saw volume ‘close to expectations’, but says the market was softer compared to the previous year due to currency impact and clearing of the channel inventory as a main priority for many countries. “Some big projects were postponed… The commercial market was soft and generally supported by government projects in many countries,” IDC says.

Mikako Kitagawa, Gartner principal analyst, says cites price increases of around 10% throughout the year, thanks to the sharp appreciation of the US dollar, as a key factor in the decline seen globally.

Unsurprisingly, that’s a view also shared by IDC, which says ‘challenging financial conditions’ and a transition period were behind the poor shipments.

“Across many regions, the channel remained focused on clearing Windows 8 inventory before a more complete portfolio of models incorporating Windows 10 and Intel Skylake processors comes on the scene,” IDC says.

“Vendors and channels were also working to limit price swings in the face of changes in currency exchange rates. Though easing a bit, currency devaluation continued to inhibit PC shipments in the third quarter.”

Both analyst firms say Windows 10 has had minimal impact so far. The operating system launched in Q3 and while it has received favourable reviews and piqued consumer interest in PCs, many users have opted to upgrade their existing PCs rather than purchase new hardware.

IDC says the unusually short time between Windows RTM and the official retail release also hampered the ability of OEMs to launch certified new models, resulting in a limited selection of Windows 10 PCs – and related advertising – through much of Q3.

The Windows 10 hardware rollout is expected to ramp up in Q4, with holiday sales.

But while the Q3 results illustrated gloomy market conditions for the PC market, both Gartner and IDC are optimistic about the future.

Gartner says its 2015 personal technology survey saw 50% of consumers expressing an intention to purchase a PC in the next 12 months, compared with 21% wanting to purchase a tablet.

“This change in consumer preferences toward PCs was visible in the preliminary data, as we saw positive growth in US notebook and premium ultramobile shipments,” Kitagawa says.

She says soft recovery is expected to start in Q4 as Windows 10 product refreshes start to appear.
“In the meantime, PC manufacturers should adjust configurations for 2016 without the impact of price hikes seen in 2015, which will lead into more stable market conditions in the upcoming year.”

Jay Chou, IDC Worldwide PC Tracker research manager, says IDC too, is optimistic about future shipments.

“While PC shipments will be hampered in the short run by the availability of a free upgrade to Windows 10, the improved PC experience across user segments should drive longer-term demand for new PC hardware that is expected to help stabilise the market in 2016 and beyond,” Chou says.

Linn Huang, IDC research director for devices and displays, says there is also some hope in the fourth quarter. “New designs running Windows 10 and powered by Intel’s new Skylake processors are coming to market and may represent the most compelling reason we’ve had in years for consumers to upgrade their PCs,” Huang says.

“Whether this compulsion translates into actual sales remains to be seen,” Huang adds, cautiously.

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