PC Shipments Are On The Decline But See Why Analysts Think Windows 10 Could Reverse The Trend

PC sales continued the decline in 2016 with a Gartner report estimating that it might b worse than we think. PC shipments declined 9.6 per cent in the first quarter of 2016. Put in real figures, about 64.8 million units of PCs were shipped and this represents the first quarter since 2007 of shipments less than 65 million.

Lenovo maintained the lead into the first quarter of this year followed y HP. From the chart which was obtained from the Gartner report, it’s clear that the cumulative quarter on quarter results produced more negatives which signify decline than positives. The story is not very different in the United States as well where Dell maintained  lead into the first quarter of 2016.

In a separate press release by IDC (International Data Corporation), the figure is slightly worse. It noted that PC shipments actually dipped by 11.5 per cent to 60.6 million units.

Lenovo, HP, Dell, Apple and Asus all dominated PC shipments in the first quarter of 2016. In as much as the results vary slightly overall probably due to methodologies and specific parameters used, a plus or minus of 2 represents some level of correlation.

What could be responsible?

While many may think the rise of smartphones and tablets may have impacted the shipments of PCs, analysts think another factor may be responsible for this decline. “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, Ms. 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.”

Both reports also agree that Apple sales were down and this was evident even in the Apple’s Quarter 2 results for 2016 where iPhone, iPad and Mac all saw a decline in sales.

As stated earlier, smartphones and tablets are now common in developing/emerging markets and with more affordable devices out there, PC sales were bound to take a hit in these countries. The picture is not different in Nigeria where smartphones now dominate especially in urban areas. It is expected that by the end of 2017, there will be well over 350 million smart devices connected to networks in Africa alone and the picture is even better when you begin to look at Asian markets.

Windows 10 to the rescue?

With Microsoft projecting that it could have a billion devices running  its Windows 10 operating system by 2018, this could beam some hope on the entire PC market going forward into the end of the year and with projections from IDC that IT spending is expected to continue to grow into 2016, it may not be all hope lost for PC makers. PCs will still play a great role in our lives for some time to come.

We’ll have to wait and see if Windows 10 could reverse this trend as we approach the end of the year.