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Tuesday, November 25, 2014
PC Outlook Remains Cautious


Worldwide PC shipments are expected to fall by -2.7% in 2014, an improvement from the previous forecast of -3.7%, according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker.

Although third quarter results were a few points ahead of forecast with shipments down only -0.5% from the prior year, most regions and market participants saw this as a short-term gain rather than as a sign of stronger growth in the medium- or long-term.

Mature regions continue to grow while a rebound in emerging regions has taken longer (due to a later impact from tablets as well as slower economics and commercial replacements). IDC found that Western Europe and Japan performed better than expected in the third quarter, but the gains were driven by a rebound from last year and short-term factors such as building fourth quarter inventory earlier in the year and continuing Windows XP replacement activity. Despite the relative short-term strength, mature regions are expected to see PC shipments decline again in 2015 and contract slightly through the end of the forecast.

The consumer market came in slightly ahead of projections in the third quarter, but shipments are still expected to decline -5% in 2014. Pressure from tablets seems to be waning as penetration rises and tablets move to smaller sizes and lower price points. However, competition for disposable income from smartphones and phablets is rising. In addition, the market was boosted in the third quarter by factors such as a rise in low-cost systems in many markets and a rebound in Western Europe, which helped restore volume to earlier levels but not without cost in value of shipments.

"The expansion of entry-level models, encouraged by Windows 8 + Bing systems, has helped improve consumer volume in recent quarters and should extend past the fourth quarter," said Jay Chou, Senior Research Analyst, Worldwide PC Trackers. "Chromebooks are similarly boosting the low-end commercial segment. However, the market is still recovering to near stable volumes with no significant growth in the forecast."

"In the best case for PCs, we'd see a significant wave of replacements as users who spent on phones and tablets in recent years decide they really need to update their PC. Features like touch or convertibility, as well as Windows 10 could make systems more versatile and appealing, along with lower prices," said Loren Loverde, Vice President, Worldwide PC Trackers. "However, we've seen steady progress on prices and new designs over the past year, and replacements are stabilizing PC shipments but not boosting total volume. Going forward, as younger generations become more mobile and Web oriented, and emerging regions in particular prioritize converged devices (or economy in number of devices to purchase), the PC market will continue to face tough competition and be more focused on replacements, with limited potential for growth."




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