Five factors in the PC sales slump

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Five factors in the PC sales slump

IDC has found that while the worldwide PC market didn't take the dive that the analyst firm forecast for the second quarter, it didn't register positive growth either.

In addition, IDC said, the next five years could be tough. The market is on what IDC calls the "slow path to stabilisation", as global economic conditions and shifting buying habits continue to impact sales. IDC predicts that PC shipments will return to positive (albeit minimal) growth in 2018.

At the root of the PC market's weakness is competition from other devices, and the fact that PCs are lasting longer, according to IDC. The organisation also expects the consolidation to benefit market leaders such as Dell, HP Inc and Lenovo, which together control more than half the worldwide PC market. 

1. Inventory buildup

IDC posits that at least some of the market's rebound is due to inventory buildup prior to the education buying season. The firm also said the channel's "cautious attitude" began to subside as months of inventory reductions began to abate.

"Although we believe much of the second-quarter result was related to a one-off inventory intake, there is still cause for optimism in the second half of this year," Linn Huang, IDC research director, devices and displays, said in a statement.

2. Not-so-great expectations

In the second quarter, worldwide PC shipments declined 4.1 percent, according to IDC. That's 3 percentage points better than IDC had predicted, and well beyond the 7.6 percent decline the market experienced in the first quarter.

However, the market isn't expected to continue improving, IDC said. The research firm is predicting worldwide PC shipments will decline 7.2 percent year over year in 2016, and slip another 2.1 percent next year.

3. Brexit beat-up

The meager gains came primarily from the US, Western Europe and Latin American markets, and were the result of rebuilding inventory, IDC said.

Still, the research firm doesn't expect that to continue for the remainder of 2016. What momentum there was in the first half was also undermined by economic and political volatility, including the fallout from Brexit, exchange rates and commodity prices.

4. Desktops decline, notebooks flat

IDC predicts 103 million desktop PCs will be shipped this year, and that that number will fall to 94.6 million by the end of 2020.

The market for notebooks is expected to fare better over the same time, but IDC's projections aren't exactly rosy. Notebook shipments are expected to land at 152 million this year and grow just 0.3 percent to 154 million by the end of 2020.

5. A market in decline

Overall, IDC expects 2016 to end with 256 million PC shipments across desktops and notebooks combined. That number will dip 0.7 percent to 249 million by the end of 2020.

It appears that emerging markets will be the only thing between the PC market and wider declines in the coming years. Emerging markets are expected to show 2.4 percent growth in notebooks between now and 2020.

They're also expected to register a 0.3 percent decline in desktops over the same time compared to a 5.7 percent drop in mature markets, IDC said.

This article originally appeared at crn.com

Copyright © 2016 The Channel Company, LLC. All rights reserved.
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