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Outlook for PC market is getting better but desktop PC market still looks bad

Posted on Thursday, December 01 2016 @ 15:58:16 CET by


Analysts from research firm IDC claim things are starting to look a bit better for the PC market. The number of PCs sold this year is expected to come in at 258.2 million units, which is better than expected. In the third quarter of this year, sales fell 4.6 percent year-over-year, which is more than 2 percent better than what IDC expected. For the full year, unit sales are expected to come in 6.4 percent lower than in 2015, which is more optimistic than the August projection of a 7.2 percent decline.

While market conditions are not expected to improve next year, the decline will not be as bad as in 2016 and 2015. IDC estimates the total volume of PC shipments will fall by about 2.1 percent in 2017. While sales of laptops are expected to remain relatively stable, desktop PCs will fall further.

Based on the current trends, IDC estimates desktop PC sales will fall from 103.5 million units in 2016 to 93.1 million units in 2020, a negative cumulative growth rate of 2.6 percent per year. Laptops on the other hand are expected to grow 0.4 percent a year from 154.7 million units to 156.9 million units in the same timeframe.

The expected growth will be realized entirely in emerging markets. In mature markets, sales of desktop PCs are expected to fall from 39.1 million units in 2016 to just 30.6 million units in 2020, a yearly decline of 5.9 percent! Laptops are expected to do better, but are still projected to fall from 87.0 million units a year in mature markets this year to 83.5 percent in 2020, a fall of 1 percent a year.
Worldwide PC shipments are forecast to decline by 6.4% year over year in 2016, according to an updated forecast from the International Data Corporation (IDC) Worldwide Quarterly PC Tracker. This is an improvement over August's projection for a decline of 7.2% in 2016. While IDC's outlook for 2017 remains at -2.1% year-over-year growth, the absolute volumes are slightly higher based on stronger 2016 shipments.

The third quarter of 2016 (3Q16) saw a year-over-year decline in shipments of 4.6%, more than 2 percentage points ahead of expectations. Although factors such as the transition to Windows 10 played a role, the 3Q16 gains came largely as a result of stronger momentum in the United States, Western Europe, and Japan, and were driven by channel build up in anticipation of component shortages in areas such as display panels and storage. This is expected to slightly boost shipments into early 2017, but will not carry into later periods.

Beyond 2016, the PC shipment outlook has been raised slightly, and continues to trend toward stabilization with modest commercial growth starting in 2018. Commercial notebook shipments are expected to grow during 2016 and throughout the forecast, with a peak at 3.7% in 2019. Commercial desktop growth is expected to be effectively flat by 2018, while consumer notebook and desktop shipments are expected to decline slightly throughout the forecast.

Competition from tablets and smartphones continues to ease as those markets mature. Nevertheless, overlap in usage and converging designs is accelerating the shift in notebooks to ultra slim and convertible designs, which are now expected to account for almost 63% of notebook shipments by 2020. Combining detachable tablets with PCs, the market is projected to decline by 3.2% in 2016 with small positive growth in later years.

"The PC market continues to perform close to expectations," said Loren Loverde, vice president, Worldwide Tracker Forecasting and PC research. "Some volatility in emerging regions is being offset by incremental gains in larger mature markets while the interaction with tablets and phones is stabilizing. We continue to see steady progression toward smaller desktops and notebooks as replacement buying helps stabilize overall shipments in the coming years."

"Despite continued weakness in the consumer segment, the U.S. PC market is showing some signs of stability in the near future with some sources of optimism for the long haul," said Neha Mahajan, senior research analyst, Devices & Displays. "Backed by early Windows 10 transitions that are expected to boost commercial PC shipments in the next couple of years, and steady growth of PCaaS (PC as a Service) which should help shorten refresh cycles of commercial systems in the long-term, the overall U.S. PC market sentiment certainly seems to be improving."




 



 

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