The global PC market will continue to see a sharp decline in shipments in the current quarter, and the picture won’t start improving until later in 2016, according to analysts with IDC.
The market research firm expects worldwide shipments to fall 10 percent in the fourth quarter, helping drive the year-over-year decline in 2015 to 10.3 percent. The struggles in the PC market will continue into next year, due in large part to such issues as a strong U.S. dollar, low commodity prices and an inventory of current systems, the analysts said.
However, as consumers and business users continue to adopt Microsoft’s Windows 10 operating system and embrace new systems powered by Intel’s “Skylake” processors, the market could stabilize by the end of 2016 and grow slightly as businesses begin replacing their PCs. Once the commercial refresh gets underway, it could drive demand for new PCs for several years. In addition, with the demand for tablets dropping and growth in the smartphone space slowing, consumers will turn more of their technology dollars toward PCs.
“Despite the substantial shift in spending and usage models from PCs toward tablets and phones in recent years, very few people are giving up on their PC,” Loren Loverde, vice president of IDC’s Worldwide Tracker Forecasting and PC research, said in a statement. “They are just making it last longer.”
When Microsoft released Windows 10 in July, officials allowed customers for the first three months to upgrade their Windows 7 or 8 PCs for free. That experience should drive more people into adopting Windows 10 PCs, “and we expect they will ultimately purchase a new device,” Loverde said.
He also noted the increasing popularity in detachable tablets, in which the device’s screen can be detached from a keyboard and used as a tablet. That will have an impact on worldwide PC numbers, “but still supports the PC vendors and ecosystem,” Loverde said.
It was the rise of mobile devices—particularly tablets, starting when Apple introduced the first iPad in 2010—that has helped drive the decline of PC shipments over the past several years. Also adding to the problems has been the lack of innovation around PCs, though that is changing with the introduction of thinner and more powerful form factors based on Windows 10 and Intel’s new processors that offer more features and improved battery life.
“Despite declining competition from slate tablets, demand for PCs has remained price-sensitive and slow,” Jay Chou, research manager for the Worldwide PC Tracker, said in a statement. “Nonetheless, the market is still evolving in more positive ways. IDC expects continued growth for all-in-one desktops as well as convertible and ultraslim notebooks. Going forward, these designs will continue to gain share, even in the face of stable PC volumes and competition from detachable tablets.”
IDC analysts expect overall shipments for PCs to decline 0.4 percent between 2015 and 2019. Notebook shipments will increase by 1 percent during the time period, while shipments of desktop PCs will decline 2.5 percent.
The PC market’s struggles in recent years have driven OEMs and component makers to expand their reach beyond the systems and into growth markets. Such vendors as Dell and Hewlett-Packard have looked to expand their capabilities in enterprise IT, while chip makers like Intel and Advanced Micro Devices have targeted such new markets as the Internet of things (IoT), immersive computing, embedded systems, wearable devices and the cloud. They also have forced changes in the space. HP in November officially split into two companies—separating its enterprise business (now called Hewlett Packard Enterprise) from its PC and printer unit (now called HP Inc.).
At the same time, Japanese PC makers Toshiba, Fujitsu and possibly Sony-spinoff Vaio reportedly are considering merging their PC businesses to create a new company, a move that analysts have said is part of a consolidation trend in the industry that is expected to continue as the market for PCs shrinks.