Consumers holding out for Windows 8 and new devices stymies PC industry growth

24 Aug 2012

The global PC market is set to grow less than 1pc in the second quarter of 2012 and analysts are suggesting consumers are holding onto their money until the next generations of computers come on the scene with Windows 8 later in the year.

According to IDC 367 million PCs will ship into the market this year, up just a fraction of a percent from 2011 and marking the second consecutive year of growth below 2pc.

Mature markets like the US have seen volumes decline while emerging markets in Asia/Pacific have also seen growth slow down.

Consumers are recession-weary but are also waiting to see what Windows 8 and ultrabook products will look like and area also considering their options in terms of tablet computer devices like the iPad and various smartphones.

Product updates later this year, the industry hopes, will revive PC growth.

Still, consumers and businesses alike are expected to be cautious with spending and when deciding to replace older products, putting a damper on medium and long-term growth..

IDC now expects worldwide PC shipment growth will average 7.1pc from 2013-2016, down from the 8.4pc compound annual growth rate (CAGR) previously forecast for 2012-2016.

“The U.S. market will remain depressed until Windows 8 products hit the shelves in the fourth quarter of 2012,” David Daoud, research director in charge of Personal Computing at IDC, explained.

“The industry is responding by reducing shipments of PCs and clearing Windows 7-based inventories to pave the way for a new generation of systems. But, as we move into the tail end of the third quarter, PC activity will continue to slow as demand drops.

“The third-quarter back to school season is also proving to be a challenging period, despite prices dropping to their lowest levels. We expect the year will end with shipments in the U.S. falling by 3.7pc, marking the second consecutive year of contraction.”

PC industry’s challenge for 2013 – educate the market

IDC remains optimistic that PC penetration opportunities in emerging markets will form the bulwark of the market and help sustain double-digit portable PC growth in the long run.

“However, a host of all-too-familiar variables will lead to a subdued second half of the year with only consumer notebooks remaining in growth mode for all of 2012,” said Jay Chou, senior research analyst with IDC’s Worldwide Quarterly PC Tracker.

“Factors such as Windows 8 coupled with ultrabooks could present a positive turn of events next year, but it also faces some initial hurdles; chief of which is that buyers must acclimate themselves to an operating system that is a dramatic departure from existing PC paradigms.

“The PC ecosystem faces some work to properly educate the market,” Chou said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years