An IT consultant firm is reporting that the PC industry ended 2016 with yet another decline in global shipments – the fifth time in as many years.
U.S.-based Gartner Inc. released a preliminary report on Jan. 11 saying that overall, PC shipments reached 269.7 million units in 2016, a 6.2 per cent decline from 2015 and equal to shipment levels in 2007. In the fourth quarter alone, PC shipments saw a 3.7 per cent decline from numbers a year earlier, totaling 72.6 million units.
Mikako Kitagawa, principal analyst at Gartner, blames much of Q4’s stagnation on weak holiday sales and a fundamental change in PC buying behavior.
“The broad PC market has been static as technology improvements have not been sufficient to drive real market growth,” Kitagawa explains in a company press release, adding that while segments such as thin light notebooks and the more innovative two-in-ones have grown fast, this has not been enough to drive overall market growth.
In terms of overall growth, Kitagawa says that the rise in consumer dependency on smartphones has contributed to the decline of PC purchases.
“Consumers in this segment have high dependency on smartphones, so they stretch PC life cycles longer,” Kitagawa says. “This side of the market is much bigger than the PC enthusiast segment; thus, steep declines in the infrequent PC user market offset the fast growth of the PC enthusiast market.”
The report mentions that increased market consolidation, which saw the top three vendors (Lenovo, HP and Dell) account for 54.7 per cent of worldwide PC shipments in 2016, up from 51.5 per cent in 2015, was also a factor in overall decline.
And although Gartner says there are growth opportunities in the market, such as the engaged PC user market, the business market and the gaming segment, these areas “will not prevent the overall decline of the PC market, at least in the next year.”
Top vendors
According to Gartner’s research, four of the top six vendors experienced an increase in worldwide PC shipments in 2016’s Q4, and the top three increased their global market share (Table 1 below).
The China-based Lenovo Group Ltd. remained in the number one position, experiencing shipment increases in North America as well as Europe, Africa and the Middle East (EMEA) region despite struggling in Japan and the Asia Pacific area. The Hewlett-Packard Company (HP) held onto the second slot and Dell Inc. came in third, with both the American companies recording three consecutive quarters of shipment growth.
Among the top six vendors, Taiwan’s AsusTek Computer Inc. (Asus) saw the largest decline in Q4, with Gartner attributing it to Asus’ strategy shift to target the higher-end of the market, which it hopes will eventually allow it to garner better profit margins.
Top regions
In the U.S. PC market, five of the top six vendors saw an increase in shipments in Q4 2016 (Table 2 below). However, PC shipments in Q4 still experienced a 1.3 per cent decline from Q4 in 2015, hitting the 16.5 million unit mark, as a result of a 48.3 per cent decline in shipments from Asus.
Kitagawa points to low-key back-to-school sales and holidays such as Black Friday and Cyber Monday as potential explanations.
“Holiday sales are no longer effective marketing opportunities for PCs since PC purchases are generally driven by a ‘need,’ rather than ‘want,’ motivation,” Kitagawa explains. “…Consumers gravitate toward other consumer electronics, such as virtual personal assistant speakers, virtual reality head-mounted devices, and wearables.”
In EMEA, PC shipments surpassed 21.9 million units in Q4 2016, a “3.4 per cent decline year over year,” Gartner says. HP secured top spot in PC shipments in the U.S., as well as in EMEA. And unlike in the U.S., holidays such as Black Friday actually drove sales, especially in Western European countries like the U.K. and France, with consumers gravitating towards “traditional notebooks, ultramobile clamshells, the hybrid form factor and gaming PCs.”
The Asia Pacific region experienced a 3.9 per cent decline from 2015’s Q4, reaching 24.8 million units in 2016. The demonetization of the Indian currency was a factor in this decrease, which led to weak consumer PC demand, however, the success of China’s 11.11 (Singles Day on November 11) online shopping event did boost consumer notebook sales, Gartner reports.