Tough Time Ahead For PC Market, Analysts Warn

The slump hitting the PC industry is not going away in 2013 analysts have predicted.

Gartner analysts’ recent numbers regarding worldwide IT spending for 2013 only added to a string of reports and observations that indicate that global sales of PCs will continue to slow as the year wears on.

Ongoing Slump

The analysts, in a 2 July report, reduced the expected growth for IT spending for the year from 4.1 percent to 2 percent, when compared with 2012. Part of that had to do with exchange rates for the dollar. However, a key contributing factor was a reduced forecast for devices, in particular PCs. Spending for devices will grow 2.8 percent, down from Gartner’s first-quarter forecast of 7.9 percent, with the decline in first-quarter PC sales continuing a trend that will last through the rest of 2013.

By contrast, tablet revenue for the year will grow 38.9 percent, while mobile phone revenue is expected to jump 9.3 percent.

Global PC sales have been slowing for more than a year, with consumers and business users opting instead to spend more of their technology dollars on mobile devices like tablets and smartphones. Vendors are still shipping hundreds of millions of PCs every year, but those numbers are falling. According to IDC analysts, about 76.3 million PCs were shipped in the first quarter, 13.9 percent fewer than the number shipped during the first three months of 2012.

The contracting figures are forcing many tech vendors – from Hewlett-Packard and Dell to Intel, Advanced Micro Devices and Microsoft – to aggressively expand and adjust their businesses to reduce their reliance on PC sales. For example, HP and Dell are looking to become larger enterprise IT solution providers, while Intel and AMD are looking for new markets for their chips. Microsoft, with its touch-enabled Windows 8 operating system, is looking to become a larger player in mobile devices, though the new OS didn’t help PC sales as much as some industry observers had hoped.

Grim Forecasts

A number of reports released in June indicate that the slowdown will continue. IDC analysts on 28 June indicated PC shipments in May continued to fall compared with the same month in 2012. Given that, they are expecting shipments in the second quarter to decline 11.7 percent, followed by decreases of 4.7 percent in the third quarter and 1.6 percent in the fourth.

“The expectation for the second quarter was not all that high, showing only minor improvement from the first quarter,” Loren Loverde, program vice president of IDC’s Worldwide PC Trackers Group, said in a statement. “But the May results reflect deteriorating conditions rather than improvement, and the market will probably fall short of projections. We still expect an improvement in the second half of the year as more new products are launched, and we get into the back-to-school and holiday seasons. But the market will likely remain cautious about the second half of 2013.”