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NZ mirroring global PC market in downward trajectory

By Heather Wright
Thu 27 Aug 2015
FYI, this story is more than a year old

PC shipments are set to continue their downward trajectory through 2016 according to the latest report from IDC - and the New Zealand news is no better.

IDC’s Worldwide Quarterly PC Tracker shows growth declining through 2016 – making five years of declining shipments.

The analyst firm says growth should resume in 2017, led by the commercial market, while consumer volume will continue to decline slightly through to 2019.

Arunachalam Muthiah, IDC New Zealand market analyst, says the New Zealand market parallels the global forecast.

“The market in New Zealand is not very different from what is happening globally,” Muthiah says.

“We are also expecting a decline for the forecast period.”

Muthiah says currency remains a major factor inhibiting growth locally, combined with the lack of a major driver, such as last year’s Windows XP end of life which forced those with the older operating system to upgrade not just the OS but, in many cases, the PC as well.

“There is no major driver and the free Windows 10 upgrade – which is not a bad thing in a way – is going to have very minimal impact on purchasing new PCs,” Muthiah says.

“So I think the total market is definitely going to slow down a lot. We are running parallel with what we are seeing globally.”

IDC is expecting an 8.7% fall in worldwide PC shipments in 2015.

IDC says it had expected the second quarter of 2015 to be a transition period as vendors prepare for Windows 10 systems in the second half of the year, final results nonetheless shrank even more than expected due to ‘a stubbornly large inventory of notebooks from prior quarters and severe constraints posed by the decline of major currencies relative to the US dollar’.

In addition to the economic issues, free upgrades of Windows 10, a ‘relative dearth of newer models’ in the short term, and channels that are reluctant to take stock also makes the prospect of growth unlikely through 2016, IDC says.

And while mobile devices have been blamed for cutting into PC sales, IDC says they can no longer be the sole culprit – except for smartphones, which are still growing, the combined volume of PCs, tablets and smartphones is expected to grow only in single digits through to 2019.

IDC attributes this to saturation and ‘good enough computing’ sentiments spreading even into tablets, which are expected to see further volume decline this year.

There is some optimism ahead, however – albeit in 2017, when IDC ‘remains optimistic’ of a modest recovery driven by the next refresh cycle and the cessation of a free Windows 10 upgrade, which should provide opportunities in notebooks and commercial segments.

Jay Chou, IDC senior research analyst, Worldwide PC Tracker, says although the shortcomings of the PC business are obvious, a silver lining is that the industry has continue to refine the more mobile aspects of personal computers, contributing to a higher growth in convertible and ultraslim notebooks.

“The de-emphasis of touch on Windows 10 also paves the way for a more familiar experience and continuing unit growth on a large-screen systems, particularly all-in-one PCs,” Chou says.

IDC is predicting a five year compound annual growth rate of 1.2% for portable PCs, out to 2019, with 1.7% growth in emerging markets and just 0.8% in mature markets.

Desktops are expected to see a five-year CAGR of -1.7%, with -3.1% decline in mature markets and 0.9% in emerging.

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