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    • PC Hardware

    PCs Still Feeling Heat From Competition, Economic Issues, IDC Says

    Written by

    Jeff Burt
    Published March 14, 2016
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      The contracting global PC market is expected to stabilize after this year, but IDC analysts are warning that the range of issues facing the space will keep PC makers from being able to significantly boost the volume of shipments after four years of declines.

      Competing products—such as detachable tablets and phablets—as well as continuing worldwide economic concerns and users extending the life cycles of their current systems will all conspire to keep shipments low, even if the numbers stabilize, IDC analysts said in a report March 11.

      “PCs remain an indispensable part of the tech landscape,” Loren Loverde, vice president of Worldwide Tracker Forecasting and PC research at IDC, said in a statement. “However, replacements continue to be postponed, and future shipments increasingly depend on replacing older PCs. Detachable tablets and phablets will remain formidable competitors to traditional PCs throughout the forecast.”

      The struggles in the PC market have been well-documented as the growing competition from smartphones and tablets have eaten away at shipment numbers since early 2012. In January, analysts with both IDC and Gartner released numbers that showed that in 2015, the number of PC shipments worldwide fell by as much as 10.6 percent, and that the total number of shipments fell below 300 million for the first time in several years.

      The hope among PC and component makers has been that as newer models sporting Intel’s latest “Skylake” processors and Microsoft’s Windows 10 operating system hit the market, interest among consumers and business users in buying new PCs will increase. There will be some gains made, the analysts said. The number of shipments of ultraslim systems will jump more than 70 percent by 2020 and shipments of convertible notebooks—which also can be used as tablets—will more than double over that time. In addition, shipments of all-in-one desktops will increase by more than a third, and notebooks with screens that are smaller than 14 inches and low-priced PCs also will see growth, they said.

      However, demand continues to be depressed by such economic trends as falling commodity prices and foreign currencies, and being able to upgrade their existing PCs with Windows 10 has enabled many PC users to extend the lives of their current systems, the analysts said. There also continues to be soft demand from channel partners, which still are trying to clear out the inventory of existing systems on their shelves to make room for newer models.

      These issues have reduced IDC’s outlook for PC shipments this year to a 5.4 percent decline—a drop of a couple of percentage points—while the outlook for 2017 and beyond has been cut by about a percent. There is still an expectation of stabilization within the industry and positive growth in 2018, but it will be up and down, with small declines some quarters and years, they said.

      This comes even as the demand for tablets continues to decline—it fell 10 percent last year. That’s because the new large-screen detachable tablets being pitched as PC replacements have come on the market and given a boost to the space. Shipments of these systems grew less than 6 percent in 2015, more than doubling the numbers a year before.

      IDC’s numbers came out just days after a more optimistic view from analysts at ABI Research. They see a PC market that is going through a significant transition with the development of new models such as two-in-ones and the rise of such systems as Chromebooks giving the new life. The data suggests that the space is changing, not fading away, they said.

      “Industry experts greatly exaggerated the death of the PC,” ABI Research Director Jeff Orr said in a statement. “The platform is continuing to evolve its designs to provide flexibility for productivity purposes, while also adapting its shape to support tablet-like, touch applications. Chromebooks and ultraportable PCs will continue to drive the most growth within the notebook PC market.”

      ABI is predicting that the number of Chromebooks shipped will grow from 6.2 million units last year to 7.6 million this year and 11.6 million by 2021, while the number of ultraportable notebooks will go from 27.1 million in 2015 to 41.2 million by 2021. The number of laptop notebooks will drop from 126.1 million this year to 116.3 million in 2021.

      In all, 163.7 million notebook PCs will ship this year, and 169.1 million will ship in 2021, the analysts said. Ultraportable PCs will make up more than 24 percent of the total number of notebooks shipped in 2021.

      Jeff Burt
      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.

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