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Business Briefing

Light at the End of the Tunnel for PC Sales in Second Half

Light at the End of the Tunnel for PC Sales in Second Half
March 5, 2013 1:09PM

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Year-over-year, the fourth quarter saw a 6.5 percent decline in PC sales in the U.S. and a 7.6 percent drop for the full year. IDC said it expects the PC to see some rebounding in the second half of this year, in part due to a "rubber band" effect of demand to replenish aging computers, as well as the end of Windows XP support and thus transitioning to newer machines.

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The bad news in a new IDC report is that worldwide sales of PCs are expected to shrink for the second year straight. The good news: PCs will rebound somewhat in 2014 through 2017.

Despite the launch of Windows 8, 2012 ended with PC shipments shrinking by 3.7 percent for the year. The research firm said Windows 8's limited traction and the continued growth of tablets will lead to another decline in 2013, by an estimated 1.3 percent.

Another factor: emerging markets, which had been exhibiting growth potential, showed their first volume decline last year. That will turn to growth for those markets next year, according to IDC, but only barely -- by less than 1 percent. For mature markets, this is the third straight year of declines.

Emerging Markets

Emerging markets, however, could be the key to the PC's return to growth worldwide. IDC expects sales of portable PCs in emerging markets to increase by more than 19 percent by 2017.

Year-over-year, the fourth quarter saw a 6.5 percent decline in the U.S. and a 7.6 percent drop for the full year. The research firm said it expects the PC to see some rebounding in the second half of this year, in part due to a "rubber band" effect of demand to replenish aging computers, as well as the end of Windows XP support and thus transitioning away from that platform.

IDC said that one of the factors hampering the sale of Windows 8 computers last year was a shortage of touchscreen components, leading to a limited sales supply of touch-enabled Windows 8 machines. Windows 8's touch interface is one of its key innovations. In particular, the lack of components is seen as being one of the factors working against a drop in prices for the lightweight Ultrabooks, which had been expected.

Tablets Not 'Functional Competitors'

Loren Loverde, program vice president at IDC, said in a statement that there was still "constrained PC demand as buyers favor other devices for their mobility and convenience factors." He added that, while IDC did not see tablets as "functional competitors" to PCs because of their limited local storage, file system, and lesser focus on traditional productivity, "they are winning consumer dollars with mobility and consumer appeal nevertheless."

The current report contrasts with IDC's report in June of last year, when it projected a growth rate of nearly 5 percent for PCs worldwide this year. In August, it lowered its estimate to 0.9 percent growth in 2012.

There has been speculation for months that Microsoft is at work on a major upgrade for Windows 8, code-named Windows Blue. While there are differing opinions as to whether this upgrade would be a service pack, a feature pack, or essentially a new face for the OS that could encompass a variety of device types, the technology giant is not saying. But the key question is whether there is some impetus coming from Microsoft that could get Windows 8 machines moving faster off physical and virtual shelves, resulting in more optimistic projections for PCs.

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