PC industry to grow 5pc this year, but uncertainty about Windows 8 release bites

19 Jun 2012

The new Surface tablet PC from Microsoft - will Windows 8's eventual release resuscitate demand for PCs?

The PC industry worldwide is in the midst of a perfect storm and is expected to grow 5pc in 2012 with 383m machines expected to ship, according to IDC. Economic uncertainty with the euro and the growth of competing devices like tablet computers are affecting confidence, but Windows 8 might resuscitate the consumer market.

According to IDC, the threat of relapse into recession in several key segments is affecting business confidence and public spending.

Windows 8 could help to reinvigorate the consumer PC market. However, questions about the release date, functions and pricing for the new operating system are likely to limit the contribution Windows 8 might make to the PC market.

Last night, Microsoft revealed its new own-branded Surface tablet PC range, which consisted of two versions, an ARM version running Windows 8 RT and an Intel version running Windows 8 Pro. It is hard to say at this point the impact own-branded Microsoft hardware will make on competition in a PC market largely consisting of OEMs who manufacture devices loaded with licensed software from Microsoft.

Consumer PC shipments are expected to see modest growth in 2012 with the revamp of a sleeker Wintel platform fuelling additional growth in 2013 through 2016.

IDC expects the forecast period to culminate with total PC shipments topping 528m units in 2016.

“The first-quarter PC volume results showed an uptick over our forecast,” said Jay Chou, senior research analyst with IDC’s Worldwide Quarterly PC Tracker.

“However, much of the volume was due to a faster-than-expected recovery of hard disk drive (HDD) supply related to flooding in Thailand. PCs continue to face pressure from a weak economic environment and growing competition.

“Consumer sentiment could be revived with ultrabook or ultrathin systems provided the right price is reached. More price cutting in the Android tablet landscape could free up some budget for PC purchases, but could also focus consumers on tablets rather than PCs.

“Ultimately, we expect modest PC growth this year as the industry works through the transition to Win8 and related devices.”

Perfect storm in US PC market

“In the United States, the PC market will continue to witness the perfect storm over the next two quarters before we see any meaningful resumption of growth.

“Most consumers and businesses in need of PCs already have PCs and see no immediate reason to upgrade or expand. The market is also evolving amid a heated presidential election campaign, adding more stress to consumer and business confidence, with both segments refraining from spending or hiring,” Chou continued.

“The good news, however, is that the forthcoming release of Windows 8 promises to bring new classes of products that could lead to a stronger refresh cycle as the year ends,” said David Daoud, research director, Personal Computing at IDC.

IDC continues to have a conservative view toward PC purchases in mature markets, which are generally expected to return to growth mode in 2012 after a contraction in 2011.

“Meanwhile, headwinds from the euro crisis are increasingly being felt in the emerging markets, the previous stalwarts of growth. The outlook for emerging markets has become more mixed with Central Europe, Middle East and Africa (CEMA) increasing its outlook while Asia/Pacific (excluding Japan) and Latin America will experience slower growth in the short term.”

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