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

Why IDC Sees Gloom in the PC's Future, but With a Glimmer of Hope
Notebook Shipments Will Actually Rise …
But There's a Very Big Catch
Desktops Are in Deep Trouble
Here's How Bad the First Quarter Was
A Range of External Issues
Hybrids Are One Growth Area
The Enterprise Might Be a Savior
Overall, Things Are Scary
This Has Never Happened Before
And It's Actually Worse Than Expected
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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 …

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

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

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

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

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

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

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

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

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

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.

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