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    Upturn in PC Market Won’t Come Until 2017, IDC Says

    Written by

    Jeff Burt
    Published August 26, 2015
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      Those expecting an upturn in the PC market to happen next year as inventory levels decline, Windows 10 becomes more pervasive and new processors hit the market may have to wait until 2017, according to analysts with IDC.

      In a report Aug. 26, the market research firm downgraded its industry forecast, saying PC shipments worldwide will fall 8.7 percent this year due in large part to a continued large inventory of notebooks already on the market and the strengthening of the U.S. dollar, which is making systems more expensive. All that is complicated by a lack of new models hitting the market, a jittery channel that is keeping a close eye on how much product they’ll stock, and Microsoft’s decision to allow free upgrades to Windows 10 for existing PCs for three months.

      Microsoft reportedly said that Windows 10 has been installed on 75 million systems.

      Those forces will combine to continue the troubles in the PC space, which has seen sales and shipments steadily decline since 2011. The trend has convinced PC OEMs and component makers like Intel and Dell to extend their reach in the IT space beyond their legacy PC businesses to help reduce their dependency on a market that continues to struggle.

      Some industry analysts had expected an upturn in the PC space next year, given the Windows 10 release, new processors from Intel (Skylake) and Advanced Micro Devices (Carrizo and, starting next year, Zen) and the relative age of many systems now in use. However, any bump will come in 2017, when the next refresh cycle will hit, the free Windows 10 upgrade will be in the rearview mirror and consumers in emerging markets are expected to increase their purchases, IDC analysts said.

      “Although the shortcomings of the PC business are obvious, a silver lining is that the industry has continued to refine the more mobile aspects of personal computers—contributing to higher growth in convertible and ultraslim Notebooks,” Jay Chou, senior research analyst for IDC’s Worldwide PC Tracker, said in statement. “The de-emphasis of touch on Windows 10 also paves the way for a more familiar experience and continuing unit growth on large-screen systems, particularly All-in-One PCs.”

      According to IDC, 281.6 million PCs will be sold worldwide this year, with that number growing to 282.1 million in 2019.

      The decline in PC shipments began to hit in 2011, as mobile devices—in particular, smartphones and tablets—become a greater focus for consumers and business users. However, tablet shipments in recent quarters have fallen as they’ve hit a saturation point in the market, and according to IDC analysts, at this point, only the smartphone market has continued to grow. Combined, the number of PCs, tablets and smartphones sold will grow only in the single digits between now and 2019 as device saturation continues and buyers settle for what analysts call “good enough computing.”

      Upturn in PC Market Won’t Come Until 2017, IDC Says

      A bright spot in the overall market appears to be two-in-one systems—devices that can be used as both a tablet and a traditional PC. In a separate report, IDC analysts said that while global shipments of tablets (including two-in-ones) will fall 8 percent this year—IDC previously forecast a 3.8 percent decline—the two-in-one market will see year-over-year growth in 2015 of 86.5 percent.

      Tablet shipments this year will reach 212 million, with most being pure slate tablets, the analysts said. However, 14.7 million two-in-ones—which also are called detachables and are more expensive than pure tablets—will ship this year. It’s an area that Intel has been pushing for several years, and IDC analysts said they see system makers getting more serious about it.

      “In the past, the biggest challenges with two-in-one devices were high price points, less than appealing designs, and, quite frankly, lack of demand for Windows 8, which was the OS most devices were running,” Ryan Reith, program director with IDC’s Worldwide Quarterly Mobile Phone Tracker, said in a statement. “With more OEMs offering devices in this segment, prices have started to come down significantly.”

      IDC is estimating that more than 40 vendors shipped two-in-one systems in the second quarter, compared with 14 vendors two years ago. The launch of Windows 10 will help fuel the growth in the field, as will more systems running Google’s Android OS hitting the market “and the possibility that Apple will unveil a larger, screen-detachable iPad,” Reith said.

      The commercial space is a particularly strong opportunity for two-in-ones, according to Jean Philippe Bouchard, research director for tablets at IDC. Businesses never warmed up to tablets because they couldn’t see how the devices could help them. That said, companies to this point have been reluctant to adopt mobile technologies beyond smartphones.

      “Commercial segments will play a crucial role in the future of two-in-ones,” Bouchard said in a statement. “It will take some time, but we expect that once IT departments are done evaluating Windows 10 and the awaited iPad Pro, they will start migrating some of their portable PC and tablet installed base toward two-in-ones, which will accelerate the adoption of the form factor.”

      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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