Bleak, bleaker, bleakest: PC market forecast projects historic 10 per cent downturn

Bleak, bleaker, bleakest: PC market forecast projects historic 10 per cent downturn

Microsoft's strategy to replace lost PC sales with tablets and 2-in-1s isn't paying off yet, but there's hope, says IDC

This year will go down as the PC industry's largest contraction, according to research firm IDC, with global shipments dropping by double digits and little relief in sight.

The dismal numbers will not be welcomed at Microsoft, which sells the bulk of its Windows licenses to computer makers as they assemble new PCs.

According to IDC's revised estimate, 2013 PC shipments will total 314 million, a 10.1 per cent decline from last year's 349 million.

The new forecast was the third reduction in 2013 expectations by IDC, which started the year thinking that the decline would be just 1.3 per cent. With each revision, the research firm's projections became gloomier, first in May when it predicted a 7.8 per cent contraction, then again in August when its analysts said the decline would intensify to 9.7%.

If IDC's latest prognostication is accurate, Asian factories will ship about the same number of PCs to distributors, retailers or OEMs as they did in 2009, two years before "peak PC," when PC shipments reached nearly 364 million before starting a 24-month-and-counting slump.

The downturn will continue through 2014, IDC maintained Monday, when PC shipments will fall another 3.8 per cent to around 302 million -- like the 10.1 per cent drop this year, a larger decline than the August estimate -- before recovering ever so slightly over the next several years. But for the foreseeable future -- at least through 2017 -- shipments will hover just north of 300 million, or about the number delivered in 2008.

"Beyond 2017, at this time we don't have reason to think the market would take off in double-digit year-over-year growth," said Jay Chou, one of the IDC analysts who works on the PC tracking team, in an email reply to questions.

The last time PC shipments climbed by double digits was in 2010, when year-over-year growth was a robust 13.7 per cent.

Other than computer component suppliers and PC makers, Microsoft will be the company hit the hardest: Sales of its Windows operating system are almost entirely reliant on new PC sales. Last quarter, for example, Microsoft said that OEM-based Windows revenue declined 7% overall, nearly the same as the drop in PC shipments for the quarter measured by IDC.

How bad are the revised forecasts for Redmond? "Pretty bad," said Chou. "Even with lower penetration, emerging regions will be down through 2014," he added, talking about developing countries that had been driving PC shipment growth.

Microsoft has been betting on Windows 8 -- and its free update, Windows 8.1 -- to revitalize the industry, or at the least drive enough shipments of new designs, including so-called "2-in-1" hybrids that function as both notebook and a slate-style tablet, to make up for the PC slump.

PC shipments will fall 10 per cent in 2013, and then another 4 per cent in 2014, according to forecasts by IDC. (Data: IDC.)

The former looks impossible at this point, said IDC, although there was hope for the latter when Windows-powered 2-in-1s and tablets are added to the mix.

"The emergence of 2-in-1 devices -- many of which will run Windows -- along with Windows-based tablets, is expected to provide some new volume for the Windows platform ... in coming years," Loren Loverde, also of IDC, said in a statement yesterday.

"But at this stage, we don't see a substantial impact" from either 2-in-1s or tablets running Windows, Loverde added in a Tuesday interview.

Like many other market research companies, IDC has wrestled with how to integrate shipment forecasts of new form factors, including convertible 2-in-1 devices and tablets, with traditional PCs. Currently, it includes neither in its PC estimates; instead it tracks tablets separately and will soon do the same for 2-in-1s.

The problem is that while 2-in-1s may resemble PCs -- and may be used as PC replacements by some -- tablets are usually not. Loverde cited the prominence of smaller-sized tablets, and their content consumption orientation, as one reason why including them in PC calculations muddies the water.

"Tablets are shifting very quickly to the low end, building on the 'third-screen' concept," Loverde observed. "They're competing less directly with PCs."

There is hope for Microsoft, said Loverde: By 2017 Windows tablet shipments should stand at 39 million units, up dramatically from around 7.5 million this year. Windows-based 2-in-1s, as demonstrated by Microsoft's own Surface Pro, also hold promise.

Even so, IDC kept its outlook conservative. "There's some potential for Windows-based 2-in-1s, but the Windows tablets on the market have limited traction so far," said Loverde. "Thirty-nine million [tablets in 2017] is a nice number, but considering the number of total PC shipments, it's not a lot of growth."

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is

See more by Gregg Keizer on

Read more about pcs in Computerworld's PCs Topic Center.

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags IDCMicrosoftWindowshardware systemsdesktop pcssoftwareoperating systemsPCs



Educating from the epicentre - Why distributors are the pulse checkers of the channel

Educating from the epicentre - Why distributors are the pulse checkers of the channel

​As the channel changes and industry voices deepen, the need for clarity and insight heightens. Market misconceptions talk of an “under pressure” distribution space, with competitors in that fateful “race for relevance” across New Zealand. Amidst the cliched assumptions however, distribution is once again showing its strength, as a force to be listened to, rather than questioned. Traditionally, the role was born out of a need for vendors and resellers to find one another, acting as a bridge between the testing lab and the marketplace. Yet despite new technologies and business approaches shaking the channel to its very core, distributors remain tied to the epicentre - providing the voice of reason amidst a seismic industry shift. In looking across both sides of the vendor and partner fences, the middle concept of the three-tier chain remains centrally placed to understand the metrics of two differing worlds, as the continual pulse checkers of the local channel. This exclusive Reseller News Roundtable, in association with Dicker Data and rhipe, examined the pivotal role of distribution in understanding the health of the channel, educating from the epicentre as the market transforms at a rapid rate.

Educating from the epicentre - Why distributors are the pulse checkers of the channel
Kiwi channel reunites as After Hours kicks off 2017

Kiwi channel reunites as After Hours kicks off 2017

After Hours made a welcome return to the channel social calendar last night, with a bumper crowd of distributors, vendors and resellers descending on The Jefferson in Auckland to kickstart 2017. Photos by Maria Stefina.

Kiwi channel reunites as After Hours kicks off 2017
Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow Electronics introduced Tenable Network Security to local resellers in Sydney last week, officially launching the distributor's latest security partnership across Australia and New Zealand. Representing the first direct distribution agreement locally for Tenable specifically, the deal sees Arrow deliver security solutions directly to mid-market and enterprise channel partners on both sides of the Tasman.

Arrow exclusively introduces Tenable Network Security to A/NZ channel
Show Comments