PC Market Continues Downward Spiral Despite Windows 10

 
 
By Jeffrey Burt  |  Posted 2016-04-12 Print this article Print
 
 
 
 
 
 
 
Lenovo PC

Microsoft's latest OS and new "Skylake" chips from Intel won't stem the decline of PC sales until later this year, IDC and Gartner analysts say.

Industry analysts have been warning for months that the global PC market would continue to see shipment declines in the first half of 2016, and that trend played out in the first quarter.

Analysts with IDC and Gartner said that in the first three months of the year, the shipments of PCs declined sharply worldwide, with little help yet coming from Microsoft's Windows 10 operating system. Gartner said PC shipments fell 9.6 percent, while IDC analysts said the numbers were even worse—a fall of 11.3 percent.

Analysts with both firms pointed to a number of challenges, including the strong U.S. dollar, an inventory in the channel of aging systems and, in the enterprise, other upgrade programs taking priority over PC refreshes. However, the PC market has been contracting since early 2012 as the popularity of smartphones and tablets has grown and new PCs have failed to excite buyers, and in large part that trend is continuing.

In emerging markets, smartphones are still preferred over PCs. Meanwhile, in more mature markets, consumers and business users for now are keeping hold of their aging systems.

"There was no particular motivation for U.S. consumers to purchase PCs in the first quarter of 2016," Mikako Kitagawa, principal analyst at Gartner, said in a statement. "There have been increased sales of two-in-one PCs, but not enough to offset the decline in desktop and traditional notebook sales."

PC makers have hoped that new systems powered by the latest Intel "Skylake" processors and running Windows 10 combined with new form factors like two-in-one and convertible PCs and the hundreds of millions of PCs in use that are 3 to 5 years old would help drive sales. That has yet to happen, though both IDC and Gartner analysts have said they expect the declines to slow and shipments to grow beginning later this year and into 2017, particularly as businesses move from testing new PCs to deploying them. In addition, the popularity of Chromebooks, particularly in schools, continues to grow.

"In the short term, the PC market must still grapple with limited consumer interest and competition from other infrastructure upgrades in the commercial market," Jay Chou, research manager for IDC's Worldwide PC Tracker unit, said in a statement. "Nevertheless, IDC still projects total business IT spending to grow compared to 2015, and as we head toward the end of 2016 things should start picking up in terms of Windows 10 pilots turning into actual PC purchases."

 IDC found that 60.6 million PCs shipped in the first quarter worldwide, while Gartner said shipments hit 64.8 million units. Gartner analysts said the three months marked the sixth consecutive quarter of shipment declines, and the first time since 2007 that the number of shipment fell below 65 million.

Practically every top PC OEM saw their numbers fall. Lenovo remained the top vendor worldwide, but according to Gartner and IDC numbers, shipments for the company fell 7.2 percent and 8.5 percent, respectively. HP Inc., which is still dealing with the fallout from the breakup in November 2015 of Hewlett-Packard, saw shipments fall between 9 percent and 10.8 percent, while declines in Dell's shipments were 0.4 percent and 2 percent. Apple and Asus also saw declines, according to IDC, though Gartner analysts said the two vendors both saw slight increases in shipments.

Gartner had Asus in the fourth spot and Apple  at No. 5, while IDC had that order reversed.

In the United States, both analyst firms said Dell overtook HP as the top vendor, and that Lenovo saw sharp increases in shipments. HP officials have said they wanted the company to focus on high-end systems and stay away from low-cost segments, which helped drive down its shipment totals, according to Gartner analysts.

"Demand for PCs in the U.S. remains sluggish," Linn Huang, research director for devices and displays at IDC, said in a statement. "However, we should be entering a period of reprieve. Peak corporate and education buying seasons have historically started in the second quarter. With some IT buyers thinking about early Windows 10 transitions and with the potential continued ascent of Chromebooks in U.S. K-12, the PC market should experience a modest rebound in the coming months."

 
 
 
 
 
 
 
 
 
 
 
 
 

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