PC Market Struggles Through Another Tough Year In 2015

The holiday season did little to slow the decline in global PC shipments, which fell by as much as 10.6 percent in the fourth quarter and came in at fewer than 300 million for 2015 for the first time in several years, according to analysts with IDC and Gartner.

In numbers released Jan. 12, Gartner analysts said shipments fell 8.3 percent in the fourth quarter over the same period in 2014, while IDC pegged the decline at 10.6 percent, to 71.9 million units. Most of the leading PC vendors saw shipments fall, though both analyst firms noted that Apple’s shipments increased 2.8 percent, marking another move forward in a contracting and competitive worldwide PC market.

Gartner analysts said that for the entire year, PC shipments fell 8 percent over 2014, to 288.7 million units. IDC analysts said 2015 marked the first time since 2008 that shipments fell below 300 million for the year.

The PC space continues to struggle with many of the same challenges that have dogged it since late 2011, including competition from mobile devices like smartphones and tablets—even with slowing growth in those markets—longer PC lifecycles, falling commodity prices and a strong U.S. dollar, according to IDC analysts. However, what they described as “social disruptions” in both the Europe, Middle East and Africa and Asia/Pacific regions played an increasingly large role.

Decline and fall?

“The fourth quarter of 2015 marked the fifth consecutive quarter of worldwide PC shipment decline,” Gartner Principal Analyst Mikako Kitagawa said in a statement. “Holiday sales did not boost the overall PC shipments, hinting at changes to consumers’ PC purchase behavior. On the business side, Windows 10 generally received positive reviews, but as expected, Windows 10 migration was minor in the fourth quarter as many organizations were just starting their testing period.”

During the fourth quarter, Lenovo remained at the top of the list, with 21.4 percent of the market, according to IDC analysts. HP Inc. stayed at number two, with 19.9 percent market share and Dell had 14.1 percent. Asus and Apple tied for fourth, with 7.9 percent share. The numbers were similar to Gartner’s.

The struggles in the PC market have had a ripple effect throughout the industry, impacting system and component makers alike and forcing them to expand their reaches into new growth areas to lessen their exposure to the PC space. Most recently, PC makers in Japan are looking at options for their businesses. Reports in December 2015 indicated that Fujitsu, Toshiba and Vaio—the PC business that spun out of Sony a year earlier—were considering merging their PC units. Soon after, Fujitsu officials announced that the company was spinning out its PC and smartphone businesses into their own companies.

Despite another difficult year for the industry, the analysts from both firms said they expect 2016 will be better, particularly in the back end of the year. Consumers and business users—many of whom already are working on PCs that are four to five years old—will be more ready to buy new PCs running Microsoft’s Windows 10 operating system and powered by Intel’s “Skylake” processors.

“The PC market remains competitive and the economic environment weakened further with the recent drop in the Chinese stock market,” Loren Loverde, vice president of IDC’s Worldwide PC Tracker unit, said in a statement. “However, PC replacements should pick up again in 2016, particularly later in the year. Commercial adoption of Windows 10 is expected to accelerate, and consumer buying should also stabilize by the second half of the year. Most PC users have delayed an upgrade, but can only maintain this for so long before facing security and performance issues.”

Most of those users, attracted to new, affordable systems, will buy another PC, Loverde said.

The industry also should look to Apple for encouraging signs, according to Jay Chou, research manager for IDC’s Worldwide PC Tracker.

“Consumer sentiment toward PCs remains a challenge, though clearly there are pockets of growth,” Chou said in a statement. “Even as mainstream desktop and notebooks see their lifetimes stretched ever longer, Apple’s emergence as a top five global PC vendor in 2015 shows that there can be strong demand for innovative, even premium-priced systems that put user experience first.”

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Originally published on eWeek.