Has the gloom finally turned into doom for the PC market? Quarter after quarter, the forecast seems to grow worse. Now, market research firm IDC is predicting shipments will decline another six percent in 2014 and continue sliding through 2018.
Here’s the latest: Worldwide PC shipments dipped 9.8% in 2013. Although that was slightly better than the expected 10.1 percent decline, it’s nevertheless still the worst contraction on record, IDC’s Worldwide Quarterly PC Tracker reports.
Likewise, fourth quarter results were slightly better than expected but the one bright spot -- emerging markets -- is also deteriorating as competition from other devices and economic pressures grow. Stateside and in other mature markets, the slight lift in Windows XP replacements fueled some improvement but IDC doesn’t expect that to last long.
Will Tablets Push Out PCs?
So, then, what’s the big picture? IDC just lowered overall PC growth projections for 2014 by just more than 2 percent. The firm also lowered growth expectations for subsequent years by less than 1 percent. However, the sum total essentially draws a goose egg, with long-term growth just below zero and pushes volumes below 300 million throughout the forecast.
"2014 will remain a challenging year for PC vendors in Asia as a cautious economic outlook means consumers will prioritize device purchases. At the same time, tectonic changes in politics will affect commercial spending in some of the major countries, like India, Indonesia, and Thailand, which are due to hold elections this year," said Andi Handoko, Research Manager for Client Devices, IDC Asia/Pacific. "The region is also seeing a void in public sector spending this year after huge education deals seen in India and Malaysia last year failed to materialize."
For additional analysis, we caught up with Roger Kay, a senior analyst at Endpoint Technologies Associates and former IDC analyst. He told us the forecast is reasonable.
“PCs will continue to decline, but they won’t go away. Tablets, phones, and other high-mobility devices won’t replace them entirely,” Kay said. “As Jon Peddie said, ‘A PC is a truck, and sometimes you need a truck.”
Kay is in the camp that expects PCs to evolve and take on more high-mobility characteristics. In fact, he noted, it’s already happening with Intel’s Ultrabooks. But the more truck-like uses -- such as workstations, “anti-mobility” machines for task workers and heavy duty keyboarding -- will be around for a long time.
“OEMs like Lenovo, Dell, and HP are doing their best to reduce their reliance on PCs, though,” Kay said. “Even Microsoft is investing in cloud services, gaming consoles, and other non-PC computing. They’re all struggling to adapt.”
The Emerging Markets Impact
With that in mind, let’s take a closer look at emerging regions, which, again, has always been a bright spot on the big picture. For the fourth quarter, emerging regions finished poorly with volume dropping 11.3 percent. But it could get worse from here .
Indeed, IDC expressed concerns that the impact of slower economic growth, the culmination of some large projects, and conservative expectations for factors like touch capability, migration off Windows XP, as well as continued pressure from tablets and smartphones has further depressed expectations going forward.
Loren Loverde, Vice President of Worldwide PC Trackers, said emerging markets used to be a core driver of the PC market, as rising penetration among large populations boosted overall growth.
“At the moment, however, we're seeing emerging regions more affected by a weak economic environment as well as significant shifts in technology buying priorities,” he said. “We do expect these regions to recover in the medium term and perform better than mature regions, but growth is expected to stabilize near zero percent, rather than driving increasing volumes as we saw in the past."
Image credit: iStock/Artist's concept.
Posted: 2014-03-06 @ 6:36am PT
A lot of people have been running the same computer for over 10 years. Otherwise they would not be still using XP?
Posted: 2014-03-06 @ 6:32am PT
Maybe it is a good thing that there are less desktops. I use my computer to watch TV and movies on the Internet, so no reason for that to be mobile as an HTPC. Some people like mobility and some people like desktop and some people like their smart phones. The other factor is people are basically Cheap. They are unwilling to pay $1500 for just a computer.