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PC shipments expected to fall again

by on26 November 2014

IDC sees another slump

Tarot readers at IDC claim that either the IT industry is going to meet a tall dark stranger, or PC shipments will fall by 2.7 per cent in 2014. To be fair this result is an improvement of its previous prediction of negative 3.7 per cent, and if we ask them in December, they will probably predict some growth.

Although third-quarter results were a few points ahead of forecast with shipments down only 0.5 per cent from the prior year, most regions and market participants saw this as a short-term gain rather than as a sign of stronger growth in the medium- or long-term. Most of the growth is in the West while it has taken longer for emerging regions to follow. Western Europe and Japan performed better than expected in the third quarter, but the gains were driven by a rebound from last year and short-term factors such as building fourth-quarter inventory earlier in the year and continuing Windows XP replacement activity.

Despite the relative short-term strength, mature regions are expected to see PC shipments decline again in 2015 and contract slightly through the end of the forecast. Again, the consumer market did better in slightly ahead of projections in the third quarter, but shipments are still expected to decline 5 per cent in 2014. Pressure from tablets seems to be waning as penetration rises and tablets move to smaller sizes and lower prices.

Competition for disposable income from smartphones and phablets is rising. In addition, the market was boosted in the third quarter by factors such as a rise in low-cost systems in many markets and a rebound in Western Europe, which helped restore volume to earlier levels but not without cost in value of shipments.

Loren Loverde, vice president, Worldwide PC Trackers at IDC said that the best case for PCs is that there would be replacements as users who spent on phones and tablets in recent years decide they really need to update their PC. Features like touch or convertibility, as well as Windows 10 could make systems more versatile and appealing, along with lower prices, he said.

"However, we've seen steady progress on prices and new designs over the past year, and replacements are stabilizing PC shipments but not boosting total volume. Going forward, as younger generations become more mobile and web oriented, and emerging regions in particular prioritize converged devices (or economy in number of devices to purchase), the PC market will continue to face tough competition and be more focused on replacements, with limited potential for growth."

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