Why IDC Sees Gloom in the PC's Future, but With a Glimmer of Hope

 
 
By Don Reisinger  |  Posted 2016-06-13
 
 
 
 
 
 
 
 
 
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    Why IDC Sees Gloom in the PC's Future, but With a Glimmer of Hope
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    Why IDC Sees Gloom in the PC's Future, but With a Glimmer of Hope

    It's long been known the PC market is in trouble as sales decline. Here are the takeaways from IDC's latest report on the beleaguered hardware space.
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    Notebook Shipments Will Actually Rise …
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    Notebook Shipments Will Actually Rise …

    Although the overall PC picture is troubled, notebooks actually will see some growth over the next four years, according to IDC. The company projected that total notebook shipments in 2016 will reach 152.3 million units worldwide and grow by 0.4 percent to 155.3 million units by 2020.
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    But There's a Very Big Catch
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    But There's a Very Big Catch

    While the idea that notebook shipments worldwide will grow sounds nice, there's one, very big catch: All of the growth is coming in emerging markets. In mature markets, like the United States, shipments will fall to 80.7 million in 2020 from 84.8 million in 2016. Luckily, emerging markets will offset that decline, as shipments grow to 74.6 million units from 67.5 million.
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    Desktops Are in Deep Trouble
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    Desktops Are in Deep Trouble

    Unfortunately, there is no way to paint a nice portrait of the desktop market. Worldwide desktop PC shipments will exceed 103 million units in 2016, according to IDC, but will fall to 94.2 million by 2020. Desktop shipments will be down nearly 5 percent in mature markets and 0.2 percent in emerging markets, IDC predicted.
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    Here's How Bad the First Quarter Was
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    Here's How Bad the First Quarter Was

    The first quarter of 2016 was very, very bad for the PC market, according to IDC. The research firm reported that total shipments were down 12.5 percent year over year, exceeding even IDC's bearish expectation of an 11.3 percent decline. In fact, the research firm said the PC market continues to be "weaker than expected."
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    A Range of External Issues
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    A Range of External Issues

    So, what's causing all of this trouble? Surprisingly, it's not just the simple things such as changing customer demand. In fact, IDC found that weak worldwide currencies are making it harder to buy PCs. In addition, the market is dealing with "political uncertainty" and "depressed commodity prices." Project delays are also causing shipment troubles.
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    Hybrids Are One Growth Area
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    Hybrids Are One Growth Area

    Consistent with what we've been hearing for several quarters, two-in-one hybrids represent a growth opportunity for the PC market. IDC said as hybrid pricing declines, the computers will become more popular, causing traditional notebooks and desktops some trouble. However, if hybrids are lumped in with traditional PCs, the market actually will grow in the coming years, albeit at a snail's pace. In other words, hybrids are very important to the future vitality of the global PC market, and vendors almost undoubtedly will respond by offering more of them.
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    The Enterprise Might Be a Savior
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    The Enterprise Might Be a Savior

    The corporate world could be the savior the PC market is seeking. The research firm reported that "a large share" of enterprise customers is currently evaluating Windows 10 to determine if the operating system is right for their companies. If ultimately they decide Microsoft is on to something, they're likely to "stabilize" the market and perhaps help it overcome the troubles it's facing with consumers.
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    Overall, Things Are Scary
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    Overall, Things Are Scary

    Despite hope for an enterprise-buying renaissance, IDC still suggested the overall PC market is in deep trouble. The company reported that total PC shipments this year, including desktops and notebooks, will reach 255.6 million units. That figure will fall by 0.5 percent to nearly 250 million units by 2020. Interestingly, the research firm also predicted emerging markets will extend their lead over mature markets in overall purchase share, accounting for nearly 56 percent of all PC shipments in 2020, up from 52 percent in 2016.
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    This Has Never Happened Before
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    This Has Never Happened Before

    Scary as that might be to companies that rely on the razor-thin margins offered by selling PCs, things are even scarier when one considers that this has never happened before. Loren Loverde, an IDC vice president, reported that the PC market now has experienced four consecutive quarters of double-digit year-over-year shipment declines. We're officially in unchartered territory in the PC market, and that must be weighing on vendors.
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    And It's Actually Worse Than Expected
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    And It's Actually Worse Than Expected

    Perhaps the scariest part of the entire "stability" forecast from IDC is that the PC market is worse than even the most critical of market analysts had anticipated. Couple that with changing market factors, and things look far worse than they did even a year ago. In other words, the PC market is in serious trouble. And judging by the last several quarters—and already-dour expectations being exceeded—things might be much worse than even IDC predicts today. Yikes.
 

Just about every research firm focusing on the technology industry has warned that the PC market will face significant headwinds in the coming years. That was made abundantly clear again on June 9 by research firm IDC, which dug a bit deeper into the market's troubles and talked about its "stability" over the next four years. Not surprisingly, given recent reports, IDC had a gloomy view on what the future holds for PCs, suggesting that by 2020, the entire market could suffer shipment declines. The issues are myriad and range from weak currencies to political problems, in addition to the standard issues technology companies face in getting computers to market. But in the end, they paint a very clear picture: Desktops are in trouble, portable PCs are weakening and the companies making them should be worried. Read through the following slides to learn more about the PC market's relative instability and why IDC believes things will get worse in the coming years as the market tries to regain stability.

 
 
 
 
 
Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.
 
 
 
 
 
 

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