PC Market Continues Slow, Steady Growth - InformationWeek

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1/14/2015
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PC Market Continues Slow, Steady Growth

An uptick in PC market growth is good news, but analysts predict slow progress in the coming year.

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Global PC shipments totaled 83.7 million units in the fourth quarter of 2014, exhibiting an increase of 1% from 2013, according to preliminary research results from Gartner Inc. The data reveals slow but consistent improvement in the market, which has been in decline for more than two years.

Some in the PC industry are looking for the release of Microsoft's Windows 10 this year to give the market a boost, but Gartner's research indicates that the operating system will not move either enterprise buyers or consumers to refresh their machines, at least initially.

Gartner's results include data for the sales of all desk-based PCs, notebook PCs, premium ultra mobiles, and Windows-based tablets; Chromebooks and non-Windows-based tablets are not included in the data. Mikako Kitagawa, principal analyst at Gartner, explained in an interview with InformationWeek that the Windows Surface, with its attached keyboard, more closely resembles a PC than an Apple iOS or Android-based tablet.

Lenovo took the top spot in Gartner's research, with 19.4% global market share in the fourth quarter. Dell and Hewlett-Packard were close followers, with market shares of 18.8% and 12.7%, respectively.

Mature markets exhibit an ongoing trend of positive growth. PC shipments in the US totaled 18.1 million for the fourth quarter of 2014, a 13.1% increase from the previous year. However, emerging markets continue to show weakness in the PC space. This weakness, said Kitagawa, is linked to these buyers' stronger preference for smartphones and tablets. PCs remain a low priority in emerging markets.

[Windows 7 users: It's time to think about that next upgrade. Read Windows 7 Mainstream Support Ends.]

Despite some sluggish movement in emerging economies, Kitagawa said the market appears to be improving, and the PC-versus-tablet debate among consumers is diminishing. "When the PC market was in decline, people were saying PCs were old." But this isn't "the death of PCs. The market will go back to slow but consistent growth going forward."

Now that tablet computers have mostly penetrated some key markets, consumers are slowly shifting their spending back to PCs, specifically mobile PCs, which were the primary market driver for the fourth quarter of 2014. This includes regular, thin, and light laptops, in addition to those with bendable or detachable screens.

This progress, Kitagawa said, indicates that the PC market is stabilizing in the wake of the tablet boom. As time goes on, people will be less device-specific. Hybrid products that combine the functionality of PCs and tablets will gain popularity.

Kitagawa expects the launch of Microsoft's Windows 10 to do little to boost the market share of Windows-based PCs, noting that an OS upgrade doesn't generate much new demand. Moving forward, Microsoft would benefit from a more user-friendly interface as consumers dislike major change. The transition from Windows 7 to Windows 8 was not well received, and it has taken years for people to ease into adopting the software.

However, other industry experts seem to think that the much-anticipated upgrade, combined with other factors, could help propel the PC market forward. "Moving forward, the US PC market should see flat to slightly positive growth," said Rajani Singh, senior research analyst at IDC, in a press release. "The US consumer PC market will finally move to positive growth in 2015, strengthened by the slowdown in the tablet market, vendor and OEM efforts to rejuvenate the PC market, the launch of Windows 10, and the replacement of older PCs."

The IDC Worldwide Quarterly PC Tracker also measured PC market growth and shared its predictions for the coming year, which differ slightly from those at Gartner. Lenovo is still No. 1, with 19.9% market share, while HP and Dell follow at 19.7% and 13.5%, respectively.

Gartner's preliminary data did not place Apple among the top five global PC providers, but IDC's research places it fifth on a global scale, with 7.1% market share for the fourth quarter of 2014. IDC indicated that Apple sold 5.75 million units in the quarter.

That said, there remains some debate over Apple's stance in the PC market. In a note to investors, Trip Chowdhry, a financial analyst with Global Equities Research, wrote that Apple controls a larger portion of the market, due to heightened enterprise IT spending in the later portion of the fourth quarter and the belief that Macs are replacing Sony products within the enterprise. GER claims that IDC's Mac shipment numbers are off by at least 200,000 units.

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Kelly Sheridan is the Staff Editor at Dark Reading, where she focuses on cybersecurity news and analysis. She is a business technology journalist who previously reported for InformationWeek, where she covered Microsoft, and Insurance & Technology, where she covered financial ... View Full Bio

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mak63
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mak63,
User Rank: Ninja
1/20/2015 | 8:59:56 PM
Re: What's in a name?
Lenovo is doing so well I wonder if it makes IBM wonder if it did the right thing by selling their PC line to them.


I was thinking the exact same thing, when I read the Lenovo growth and market share. I think it's fair to assume that they might not be too happy about it.

the belief that Macs are replacing Sony products within the enterprise.

I wish they (Global Equities Research) could back up that statement with facts/numbers. Anyway, replacing what, TVs? Does Sony really have a big footprint in the IT sector?
DDURBIN1
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DDURBIN1,
User Rank: Ninja
1/18/2015 | 7:32:15 AM
Margin of error
A one percent growth is in question when one analyst says the other analyst is missing 200k Macs. The margin of error puts in question this growth. Plus who is the fourth largest maker? This might be Acer.
kstaron
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kstaron,
User Rank: Ninja
1/17/2015 | 1:48:29 PM
PC's still have a place
I'm not that surprised by PC growth when you factor in laptops. Tablets are great but even with optional keyboards, sometimes it's just easier to work on a bigger screen with a bigger processor than you can fit in a tablet. I love a tablet but I still need a spot for a CD rom, I still need enough power to play the games I like. And I imagine a bigger screen and more power is a big help to designers too. When do you prefer to use a PC over a tablet?
David Wagner
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David Wagner,
User Rank: Strategist
1/15/2015 | 12:57:27 PM
Re: OS change
@whoopty- Well, there are a couple of things here, I think. One, Microsoft has been saying that the price of Windows 10 will be very cheap (and possibly free) so the dynamic might change a bit. Second, the reasonf or the bump in the past is that people who are looking to replace PCs near the end of the life cycle of one OS, sometimes wait for the next OS so they don't fall behind. This is more true among consumers. Finally, a new OS gets people talking about computers again and makes people think about buying new ones. PCs don't have the same new car style of economy. A new version of a PC won't get people to wait in line. So the OS is the equivalent to announcing a new iPhone or Galaxy.
David Wagner
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David Wagner,
User Rank: Strategist
1/15/2015 | 12:54:21 PM
Re: What's in a name?
@jastroff- Yes, Lenovo is doing so well I wonder if it makes IBM wonder if it did the right thing by selling their PC line to them. 
David Wagner
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David Wagner,
User Rank: Strategist
1/15/2015 | 12:52:38 PM
Re: What's in a name?
@Susan- I suspect you are right, but I suspect the distinctions that are saving people in the short term (hey look we're number three in a growing market even though we only make desk top PCs and crummy laptops) are what will kill those companies in the long run. By propping up industries by playing with figures you just hide the truth.
Whoopty
IW Pick
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Whoopty,
User Rank: Ninja
1/15/2015 | 10:39:16 AM
OS change
I'm always surprised when analysts get excited for the PC industry around the launch of a new OS. Sure it will get a few early adopters in there, but most PC users won't touch it for a while due to costs and waiting to make sure its backwards compatible with all their games and important software. 

Similarly enterprises won't do it for years because it's a big investment. 

In reality, most people seem to wait until Microsoft drops support and then there's a big investment. I wonder if the final lack of support for XP has driven much of ther upswing in the market in recent months? 
jastroff
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jastroff,
User Rank: Ninja
1/15/2015 | 9:58:45 AM
Re: What's in a name?
Well, regardless of the name, it looks like Lenovo is making hay while the sunshines. I suspect, but don't know, they have the majority of their sales outside of the US -- rest of world was always their focus.
Pablo Valerio
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Pablo Valerio,
User Rank: Ninja
1/15/2015 | 9:42:27 AM
Re: What's in a name?
Dave, I agree with you! I am a Chromebook convert since a year ago. Now I have a Chromebox as a desktop computer and a Chromebook 13 for mobility. And I don't need to transfer any files between them as everything is in the cloud.

I still have a Dell laptop running XP to have access to some office files, but 99% of my work is now on athe ChromeOS devices. I believe they shoud be included as PCs, such as Windows machines of MACs. 

I believe they are playing with numbers espscially after Chromebooks are getting a lot of attention in sectors such as education.
Susan_Nunziata
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Susan_Nunziata,
User Rank: Strategist
1/14/2015 | 8:45:43 PM
Re: What's in a name?
@David: I don't think the manufacturers themselves have caught up with your way of thinking about this, Dave, and so the separation still matters to them in terms of how they track performance. In most cases, these products (PCs, tablets, smartphones) are handled by entirely different groups within the vendor organizaiotns and have different supply chain processes accompanying them.

Eventually, all of this will merge, both in form factor and in our ways of thinking about it, but for now the distinctions are still very real for many folks in terms of their livelihood and business structure.
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