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Enterprise Hardware

IDC Forecasts Record 10% Decline in PC Market for Year

IDC Forecasts Record 10% Decline in PC Market for Year
December 3, 2013 12:59PM

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The chief concern for future PC demand is perhaps a lack of reasons to replace an older system. "Despite industry efforts, PC usage has not moved significantly beyond consumption and productivity tasks to differentiate PCs from other devices," said Jay Chou, IDC analyst. "As a result, PC lifespans continue to increase, thereby limiting market growth."

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More bad news for the PC industry. IDC is predicting worldwide shipments will fall 10 percent in 2013, marking the most severe yearly contraction on record.

It seems interest in PCs has remained limited in the tablet era, which is leading to few signs of positive growth beyond replacing existing machines. And it just gets worse in the near-term. IDC expects total shipments to decline another 3.8 percent in 2014 before turning slightly positive in the longer term.

At these rates, total PC shipments will remain just above 300 million during the forecast -- barely ahead of 2008 volumes. Even in emerging markets -- a primary growth engine of the PC market -- shipments are projected to decline in 2014 and recover by only a few percentage points during the forecast.

We asked Roger Kay, senior analyst at Endpoint Technologies Associates, for his take on the report. He told us IDC offers estimates in line with what he expected: "The declining fortunes of the PC market have been apparent for a while. But this trend may be even accelerating slightly."

Why Buy a New PC?

Jay Chou, senior research analyst for the Worldwide Quarterly PC Trackers at IDC, said the chief concern for future PC demand is perhaps a lack of reasons to replace an older system.

"While IDC research finds that the PC still remains the primary computing device -- for example, PCs are used more hours per day than tablets or phones -- PC usage is nonetheless declining each year as more devices become available," Chou said.

"And despite industry efforts, PC usage has not moved significantly beyond consumption and productivity tasks to differentiate PCs from other devices. As a result, PC lifespans continue to increase, thereby limiting market growth."

Commercial Market Better

The commercial market is faring notably better than the consumer market in 2013 with shipments declining by 5 percent year over year, compared with nearly 15 percent for the consumer market.

IDC said the relative stability is due to a mix of more stable PC investment planning, a smaller impact from tablets, and to replacements of Windows XP systems before the end of support planned for 2014. However, the firm noted, the long-term outlook for the two markets is not significantly different, with a small decline projected for both consumer and commercial segments in 2014 and near-flat growth in the longer term.

Loren Loverde, IDC's vice president for Worldwide Quarterly PC Trackers, said the emergence of 2-in-1 devices designed to function in both clamshell and slate configurations -- many of which will run Windows -- along with Windows-based tablets themselves, is expected to provide some new volume for the Windows platform as well as the PC vendors and other parts of the traditional PC ecosystem in coming years.

"The Windows-based tablet market -- covered in IDC's Worldwide Quarterly Tablet Tracker -- is expected to grow to 39.3 million units in 2017 from less than 7.5 million in 2013 and less than 1 million in 2011," Loverde said.

"However, relative to a PC market size of roughly 300 million units, these Windows tablets would add just a couple percent a year relative to PC growth. Even so, these Windows devices are projected to account for 10 percent of a combined PC and Windows tablet market by 2016 -- making them an important growth segment for the PC ecosystem."

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