Friday, July 13, 2018

Personal Computing Outlook Reflects Ongoing Change

The global adoption of public cloud computing services, the increased performance of smartphones and the demand for Chromebooks continue to negatively impact the rest of the consumer electronics market and to a somewhat lesser degree the enterprise IT marketplace.

Results for the second quarter of 2018 (2Q18) showed shipments of traditional personal computers (PCs) totaled 62.3 million units -- that's a year-on-year growth of just 2.7 percent, according to the latest worldwide market study by International Data Corporation (IDC). While it's a relatively small improvement, it's actually better than IDC's initial forecast of 0.3 percent growth.

Personal Computing Market Development

Although helped to some extent by a weak second quarter in 2017, which was somewhat impacted by key component issues, the 2Q18 results reversed the trend from the previous three quarters, which had the market hovering slightly above or below flat growth.

Business volume appeared to be the key driver with the top three vendors reaping benefits across both desktop and notebook computers. Moreover, the market continued to grow for both premium as well as entry models. Chrome OS-based devices, premium notebooks, and gaming PCs all further fueled the mix in the wake of improved supply and prices of graphic cards.

Not surprisingly, the recovery is relegated to the highest echelon of the market as the top five vendors all posted positive year-on-year growth, collectively growing over 7 percent and capturing nearly 78 percent of the overall market.

According to the IDC assessment, scale continued to be the catalyst for industry consolidation. Plus, many smaller consumer electronics manufacturers have chosen to abandon the PC and media tablet marketplace due to shrinking global demand.

From a geographic perspective, all regions exceeded forecast, with both mature and emerging markets seeing good activity. The U.S. market delivered another growth quarter after coming in just below flat in 2017.

"Although traditional PCs may not be the default device for many usage scenarios, the market continues to show pockets of resiliency as PC usage experience evolves and improves," said Jay Chou, research manager at IDC. "Even certain types of desktops are seeing growth amid this business-driven refresh cycle."


PC Market Regional Highlights

United States: The traditional PC market registered its second consecutive quarter of year-on-year shipment growth with a total of 17.3 million units. The desktop market saw shipments rising after a long decline with growth being driven by increased commercial purchases and supported by growing consumer demand for gaming systems. The enterprise shift to Windows 10 and an overall positive economic environment also helped maintain momentum on the notebook side.

Europe, the Middle East and Africa (EMEA): The traditional PC market experienced modest growth, owing to a further wave of device renewals in the commercial space. Despite the trend toward mobility, desktops once again played a strong role in driving the overall performance of the market.

Asia-Pacific (excluding Japan) (APeJ): The traditional PC market came close to IDC's forecast, supported by positive results in India, where better than expected consumer demand and good traction in the commercial market drove shipments. Meanwhile, the Department of Education project contributed to a strong increase in the commercial space in the Philippines.

China: The PC market in China performed above expectations, as better than forecasted sales and the launch of new models during the 618 Festival contributed to higher sell-in of consumer notebooks. On the other hand, the China commercial PC market remained impacted by weak shipments to SMBs and the public sector.

Japan: The market came in above expectations as commercial demand helped desktop and notebooks alike to exceed the forecast.