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IDC more pessimistic about PC sales, expects 4.9 percent fall this year

Posted on Friday, March 13 2015 @ 11:44:42 CET by


Yesterday we wrote on DV Hardware that Intel cut its revenue forecast for Q1 2015 by seven percent and now research firm IDC issues a warning that worldwide PC shipments in 2015 are expected to be worse than expected. The firm downgraded its forecast from -3.3% to -4.9% but slightly raised projections for 2016 and 2017.

Global desktop sales are expected to shrink from 133.8 million units in 2014 to 125.5 million units in 2015, while laptop sales are expected to fall from 174.3 million to 167.5 million. In total, the combined volume is expected to decline from 308.1 million units last year to 293.1 million units this year. The multi-year forecast doesn't look bright either, IDC expects demand for computers will shrink further to 291.4 million units in 2019.
Worldwide PC shipments are expected to fall by -4.9% in 2015, a drop from the previous forecast of -3.3%, while growth projections for 2016 and 2017 were raised slightly, according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker. Fourth quarter 2014 (4Q14) results were 1.7% ahead of forecast, but economic and product changes will create a head wind in the short term. Total 2015 volume is projected at 293.1 million PCs, slipping a little further to 291.4 million in 2019. In value terms, the PC market reached US$201 billion in 2014, a decline of -0.8%, and is expected to fall another -6.9% in 2015 with smaller declines in subsequent years bringing the total to US$175 billion by 2019.

Although portions of the market saw genuine improvements in demand during the second half of 2014, part of the 4Q14 volume was inflated by an inventory build-up of "Windows 8.1 + Bing" systems in anticipation of Microsoft scaling back subsidies in early 2015. IDC expects the short term impact to hit consumer channels as they work to clear stock. In addition, average prices are likely to rise in the near term with the scaling back of Bing subsidies, the strong US Dollar (which makes systems more expensive abroad), and the continuing shift to slim, convertible, and touch-based systems. Furthermore, while recent processor updates have generated positive reception, more significant product refreshes from the likes of Intel (Skylake platform) and Microsoft (Windows 10) will be released later in the year, shifting OEM product updates and consumer interest toward later in 2015.

"Fortunately for PC makers, tablet growth has slowed," said Jay Chou, Senior Research Analyst, Worldwide PC Trackers. "The PC ecosystem has also begun to see some fruits from efforts to narrow the divide between the PC and mobile devices in terms of both user experience and price points. Nevertheless, much more needs to be done as advances in both hardware and software are expected to benefit an ever wider spectrum of form factors, such as 2-in-1 devices that will further siphon volume from notebooks."

Emerging markets continue to struggle, finishing 2014 with a decline of 9.5% in PC shipments and with 2015 growth projections lowered to -4.7%, pushing volume down throughout the forecast. Continued political instability, commodity pricing pressures, and currency devaluations in these regions have curtailed spending across a number of sectors, including public projects that provided a boost in recent years. Competition from other devices such as phones, tablets, and wearable tech also pose an ongoing challenge to PC spending. Although emerging regions are still expected to see positive growth by 2017, shipment projections remain below 160 million units through 2019, down from 163.7 million in 2014.

Mature regions continued to fare better, ending 2014 with positive growth of 8.4% for the year, the first growth year since 2010. This growth was supported by XP system replacements, slowing tablet purchases, and aggressive PC pricing. Nevertheless, PC volumes in mature regions are expected to drop by -5.1% in 2015 with incremental declines thereafter. Building on the strength of 2014 volume as well as attractive products in the premium and low-priced segments, projections for PC volume in mature regions are up slightly to 134 million in 2019 from the prior forecast of 130 million.

The introduction of Windows 10 later this year is expected to be well received and support the Windows ecosystem, including some replacements. However, it will also provide a better experience with mouse and keyboard, effectively relieving some pressure to move toward touch, and support non-PC devices like 2-in-1s, likely without boosting total PC shipments significantly.

"The gains in mature regions for 2014 helped stabilize the market, but any opportunity for long-term growth depends on reviving growth in emerging regions, and that seems unlikely with the shift toward mobile devices," said Loren Loverde, Vice President, Worldwide PC Trackers. "Even including 2-in-1 systems would only boost the compound annual growth rate (CAGR) for total PC shipments through 2019 from -1.1% to 0.5%. Vendors can focus on growth segments of the PC market such as AIO, slim and convertible PCs, or consolidate share, but pressure on pricing and from competing devices will continue to make it a challenging market."






 



 

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