PC shipments hit by weak demand in emerging markets

Desktops

by CBR Staff Writer| 04 June 2014

Global forecasts lowered further as impact from smartphones and tablets continues.

PC shipments are expected to fall 6% during this year despite a surge in demand in Western Europe and above expectation performance in other mature regions, according to IDC Worldwide Quarterly PC Tracker.

Analysts have lowered the forecast for shipment growth to less than one percent for 2015-2017), while in 2015 it will be down 1.6% year on year and during the subsequent years it could record between 0 and -1% growth.

Stable shipment numbers to mature markets can be attributed to the slowing market for tablets.

PC Shipment

Copyright IDC 2014

The replacement of Windows XP OS also had a positive impact on the shipment which the analysts believe that it will continue to benefit the market for few more quarters.

IDC Worldwide PC Trackers vice president Loren Loverde said PC shipments are currently benefitting from a lull in tablet demand due to rising tablet penetration in mature regions and competitive pressure on smaller tablets from large-size smartphones (sometimes referred to as Phablets).

"However, the transition toward mobile and cloud-based computing is unstoppable," Loverde said.

"PCs continue a slow transition toward touch and slim designs, even as tablet volume is expected to pass total PC volume in the fourth quarter of 2014 and on an annual basis in 2016."

"To return to growth, the PC industry is going to need to accelerate the shift to lower-cost, thin, and touch-based designs, despite the challenges it has faced with these designs in the past."

Despite gains from mature markets, weaker demand in emerging economies and pressure from other devices like smartphones and tablet continue to cloud the longer terms demand.

Weak demand from emerging regions-which a cornerstone of long-term market stability, outweigh the short term boost the PC market received from by mature markets.

Even though the PC vendors are trying to boost volume in low end market through Chromebook, consumer's interest in PCs remains constrained and price sensitive which can be seen from overall decline in the market and slower off take in ultraslim notebooks.

Worldwide PC Trackers research analyst Jay Chou said 2014 represents an important shift for the PC market in emerging regions.

"Shipments in these parts of the world are expected to contract in double digits (nearly 20 million units fewer) compared to 2013," Chou added.

"Political and economic instability in many of these markets are key factors affecting short-term intake, but a fundamental shift toward computing across the device spectrum represents a broader transition."

"IDC still expects refresh projects and continued growth in underserved areas to bring modest growth in emerging markets by 2016, but the overall volume has been further curtailed to less than 165 million units per year through the forecast horizon."

Competition in the market has already claimed its scalp with Sony selling its PC division while Samsung is refocusing on its PC business, and the analysts believe that further restructuring and consolidation is going to happen in future keeping in line with broader mobility and computing trends.

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