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Thursday, April 20, 2017

An Uncertain Future for the PC Market Lingers in 2017

Worldwide personal computer (PC) shipments totaled 62.2 million units in the first quarter of 2017 -- that's a 2.4 percent decline from the first quarter of 2016, according to the latest market study by Gartner. Moreover, it's the first time since 2007 that shipments fell below 63 million units in one quarter.

That said, the PC industry experienced modest growth in the business market, but this was offset by declining consumer demand. Some people will refrain from replacing older PCs, and others have abandoned the PC market altogether. Gartner's study did not include Chromebooks, which are in greater demand.

Regardless, Garner has emphasized that the business segment of the market still considers the PC as an important device, and it's the main work computer device for many businesses.

Personal Computer Market Development

"While the consumer market will continue to shrink, maintaining a strong position in the business market will be critical to keep sustainable growth in the PC market. Winners in the business segment will ultimately be the survivors in this shrinking market," said Mikako Kitagawa, principal analyst at Gartner.

According to the Gartner assessment, vendors who do not have a strong presence in the business market will encounter major problems, and they will be forced to exit the PC market in the next five years. However, there will also be specialized niche players with purpose-built PCs, such as gaming PCs and ruggedized laptops.

The PC industry is also experiencing a price increase. Over two years ago, the price hike was attributed to the local currency deterioration against the U.S. dollar. This time around, the price hike is due to a component shortage.

DRAM prices have doubled since the middle of 2016, and SSD has been in short supply as well. The price hike will suppress PC demand even further in the consumer market, discouraging buyers away from PC purchases unless it is absolutely necessary. The price hike started affecting the market in 1Q17.

In the U.S., PC shipments totaled 12.3 million units in the first quarter of 2017 -- that's a 2.4 percent decline from the first quarter of 2016. The U.S. market has experienced a modest decline for two quarters. Much of the decline is attributed to the weak consumer market.

Global Outlook for Personal Computers

PC shipments in EMEA totaled 17.9 million units in the first quarter of 2017 -- that's a 6.9 percent decline year over year. All major regions in EMEA experienced a decline in the first quarter. However, Russia saw single-digit PC growth, which was attributed to stabilization of the local economy.

Gartner reports that the Asia-Pacific market demonstrated some stabilization, as PC shipments totaled 22.8 million units in the first quarter of 2017 -- that's a 0.8 percent decline from the first quarter of 2016. PC spending in China began to show a modest recovery. Steady economic conditions were an influencing factor driving a PC refresh.