PC industry outlook dim as markets continue to struggle

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Worldwide PC shipments are forecast to decline by 7.3% year-over-year in 2016, according to an updated forecast from research firm IDC.

pc forecast

The outlook continues to call for progressively smaller declines through 2017 followed by stable volume in 2018. However, growth in 2016 is now expected to be roughly 2% below earlier projections as conditions have been weaker than expected.

Growth in the first quarter of 2016 (1Q16) came in at -12.5%, just below IDC’s forecast of -11.3%, and inhibitors such as weak currencies, depressed commodity prices, political uncertainty, and delayed projects continue to constrain shipments.

Although growth rates for devices such as phones and tablets continue to fall, potentially reducing the competitive pressure on PCs, IDC said it has not seen this translate into stronger PC shipments.

The financial pressure on consumers across regions, and the availability of alternatives such as delaying a PC replacement by using a free Windows 10 upgrade or relying more on other devices continues to pressure consumer PC shipments, it added.

Similarly, while a large share of enterprises are evaluating Windows 10, the pace of new PC purchases has not yet stabilized commercial PC shipments.

Detachable tablets also present a growing challenge as specs and price increasingly compare favorably against notebook PCs.

Combining detachable tablets with PCs, the market is projected to decline by just over 2 percent in 2016 with small positive growth in later years, though still falling well short of peak shipments.

“The latest update reflects continuing pressure on PC shipments, but does not significantly change the factors driving the market,” said Loren Loverde, vice president at IDC.

“In addition, we have now had four consecutive quarters of double-digit volume declines. This type of prolonged slump is unprecedented, and lowers the bar for some improvement going forward. Unfortunately, the PC market still faces some persistent challenges, and for now, improvement continues to mean slower declines.”

“Although inventory has improved in some markets, channels remain extremely conservative,” said Jay Chou, research manager at IDC.

“The economic and competitive pressures are particularly affecting the consumer segment, which is projected to see another year of double-digit declines in 2016, and decline throughout the forecast. In contrast, commercial shipments are projected to decline just 4.4% in 2016 and see slightly positive growth for the next few years.”

The US PC market suffered a rough opening salvo.

“There are some strong market drivers imminent. Chromebooks should continue their rapid ascent in US K-12 as we enter the peak education buying season,” said Linn Huang, research director at IDC.

“We also believe that some organizations will have been testing Windows 10 throughout the year and will start the transition in earnest towards the end of the year. Still, the backdrop to all of that remains an ever softening consumer PC market.”

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