Long lifecycles and new TVs dampening PC demand?

MUMBAI, INDIA: Asia/Pacific PC shipments seem to have touched 23.3 million units in the first quarter of 2016, registering a 5.1 per cent decline from the first quarter of 2015.

It could be due to the ongoing fragile Chinese economy and weak global demand that continued to dampen consumer sentiment in the region.  With high PC penetration in the major cities, it was a challenge to invoke PC replacements on the appeal of new technology. The PC life cycle is lengthening as many consumers are waiting until their PC breaks down before purchasing a new one, Gartner observes.

PC shipments in EMEA on the other hand, totaled 19.5 million units in the first quarter of 2016, a decline of 10 per cent year over year. In Western Europe, consumer demand remained stable in Germany and the U.K., while in France, the PC segment was impacted by the transition to high-definition TV. Consumers preferred to buy new TVs or a specific box for the TV reception. In the business segment, large organizations are testing and evaluating Windows 10, and major deployment will start at the end of 2016.

As to the worldwide PC shipments, there was a decline of 9.6 per cent here as well, with shipments totalling 64.8 million units in the first quarter of 2016, according to preliminary results by Gartner, Inc. This was the sixth consecutive quarter of PC shipment declines, and the first time since 2007 that shipment volume fell below 65 million units.

"The deterioration of local currencies against the U.S. dollar continued to play a major role in PC shipment declines. Our early results also show there was an inventory buildup from holiday sales in the fourth quarter of 2015," said Mikako Kitagawa, principal analyst at Gartner.

"All major regions showed year-over-year shipment declines, with Latin America showing the steepest drop, where PC shipments declined 32.4 percent. The Latin American PC market was intensely impacted by Brazil, where the problematic economy and political instability adversely affected the market, Kitagawa said. "The ongoing decline in U.S. PC shipments showed that the installed base is still shrinking, a factor that played across developed economies. Low oil prices drove economic contraction in Latin America and Russia, changing them from drivers of growth to market laggards."

PCs are not being adopted in new households as they were in the past, especially in emerging markets. In these markets, smartphones are the priority. In the business segment, Gartner analysts said the Windows 10 refresh is expected to start toward the end of 2016.

"Vendors that had a strong consumer focus struggled to increase sell in shipments," Kitagawa said. "There was no particular motivation for U.S. consumers to purchase PCs in the first quarter of 2016. There have been increased sales of two-in-one PCs, but not enough to offset the decline in desktop and traditional notebook sales."