Nothing Can Revive PC Sales, Not Even Windows 10

by CXOtoday News Desk    Jul 08, 2015

gadgets

Looks like PC sales will continue to suffer in the coming quarters. Even the much hyped upcoming release of Microsoft’s new operating system, Windows 10, cannot boost PC sales growth this year, market research firm Gartner wrote in a new report . Ranjit Atwal, research director at Gartner stated that the release of Windows 10 on 29th July will in fact contribute to a slowing professional demand for mobile PCs and premium ultramobiles.

According to the forecast, worldwide spend on gadgets overall will drop this year than it did in 2014. This is the first ever slide since 2010. Analysts from the research firm predict users will spend a total of $606 billion in 2015, which is a decline of 5.7 percent compared to last year and lower than what Gartner had forecast just three months ago.

The end of the migration from Windows XP negatively affected the PC market globally during the first half of 2015; however, the greater impact remains the currency depreciation against the dollar. PC vendors are increasingly reducing their inventory levels — by at least 5 percent until the end of 2015 — as a way to minimize pricing exposure in the channel. 

“Another reason for the drop is partly because fewer people are buying desktop computers in Western Europe, Japan and Russia,” said Atwal. The global PC shipment market is expected to total 300 million units in 2015, a decline of 4.5 percent year on year. “We do not expect a recovery until 2016,” he said.

The research firm projects that sales of desktops and ultramobile devices such as tablets will continue to drop this year. The ultramobile segment (tablets and clamshells) is also on pace to contract in 2015. Ultramobile shipments are estimated to total 214 million units in 2015, a decline of 5.3 percent year on year. Tablets will account for 207 million units, a decline of 5.9 percent from 2014. 

“The tablet has become a ‘nice to have’ device, and there is no real need for an upgrade as regularly as for the phone,” said Roberta Cozza, research director at Gartner in the release. She also said that the tablet market is reaching its saturation point, and that analysts expect users to upgrade their tablets an average of once every three years — far less than smartphones.

Worldwide Devices Shipments by Device Type, 2014-2017 (Millions of Units)

Device Type

2014

2015

2016

2017

Traditional PCs (Desk-Based and Notebook)

277

251

243

233

Ultramobiles (Premium)

37

49

68

89

PC Market

314

300

311

322

Ultramobiles (Tablets and Clamshells)

226

214

228

244

Computing Devices Market

540

514

539

566

Mobile Phones

1,879

1,940

2,007

2,062

Total Devices Market

2,419

2,454

2,546

2,628

Note: The Ultramobile (Premium) category includes devices such as Microsoft’s Windows 8 Intel x86 products and Apple’s MacBook Air.

The Ultramobile (Tablets and Clamshells) category includes devices such as, iPad, iPad mini, Samsung Galaxy Tab S 10.5, Nexus 7 and Acer Iconia Tab 8.

Ultramobiles — All Ultramobile Basic and Utility Devices.

Source: Gartner (July 2015)

Sales of mobile devices such as smartphones as well as of high-end laptops will continue to grow, the firm said. However, even within that bright spot, there is some hint of a slowdown as the mobile phone market growth rate is expected to slow down to 3.3 percent growth in 2015. The rates of first-time smartphone buyers in China, one of the world’s fastest-growing and most important mobile markets, have slowed. That’s bad news for companies that have been marketing aggressively to the Chinese market to get a leg-up in sales.

“The global market has been affected by a weaker performance in China. We have witnessed fewer first time buyers in China, a sign that the mobile phone market in there is reaching saturation. Vendors in China will have to win replacement buyers and improve the appeal of their premium offerings to attract upgrades, if they want to maintain or increase their market share,” said Annette Zimmermann, Research Director at Gartner. 

“Vendors looking to grow their performance in the global smartphone market will be challenged to quickly enhance their expansion into emerging markets outside of China, where we still witness a sizeable share of feature phones and an opportunity for double-digit smartphone growth,” concluded Zimmermann.