The seven years of lean times in the PC industry will be over next year as Windows 10 adoption increases, according to technicolour dreamcoat analysts at Canalys.
The analyst claims that a “slight recovery” next year will see shipments of desktops, notebooks and two-in-ones edge up 0.3 percent. Hardly time for the seven fat cows, but beggars can’t be choosers.
Canalys chief analyst Alastair Edwards said: “Windows 10 refresh will continue to be the main driver of commercial demands for PCs in 2019.
“This will be buoyed by strong economic performance and business spend in the US, the largest PC market in the world, as well as a continued global push to upgrade on the back of heightened IT security concerns. Furthermore, 2019 is likely to bring about an easing of component supply constraints that have recently plagued the industry. Intel and its partners have admitted that slight supply of 14-nanometer processors will delay PC shipments this year, while DRAM shortages will start to ease towards the end of 2018, with the effects to be felt next year.”
Canalys said that the channel will see the success it has found with Windows, both through sales and services, continue for a period of time.
However, it warned that this will not last forever, claiming that the spell could come to an end in the first half of next year. Canalys added that the most “successful partners” will be the ones that build out managed desktop and subscription services.
This trend has been supported by two recent vendor announcements, with both Microsoft and HP launching desktop-as-a-service offerings.
There could be a drastic cut back in the number of notebooks on the market.
Word in from the Far East is that notebook ODMs, such as Quanta and Compal, have been expanding staff specifically for servers used in cloud computing data centres, their component suppliers, including thermal modules, power supplies and metal stamping, have also extended related production.
It seems likely that the manufacturers have had a gutsful of making PCs that no one wants and are seeing the future as being cloudy.
Intel’s datacentre business units had 10% growth in second-quarter revenues, while profits from the business also surpassed those of its PC business, making the datacentre centre business the CPU giant’s new main profit contributor. The trend also triggered upstream supply chains to start turning their focuses to the segment.
Choung Technology said that more than 40 per cent of its revenues contributed by server-related products. CCI ships about eight million thermal modules for servers each year, and is supplying to clients including HP, Dell, and Quanta.
Furukawa Electric also stuck its foot in the door supplying Google and Microsoft to supply products for their datacentres. The company also started sending samples to Facebook and Amazon recently, looking to expand into their supply chains.
Quanta’s server team has about 1,000 employees and is focusing mainly on the integration between software and hardware. By the end of 2015, Quanta is looking to double the team’s personnel and will continue to recruit more talent in 2016.
Manufacturers of notebooks and tablets are looking to new markets to bolster their businesses because Europe can no longer be relied upon for healthy sales.
Last week we reported PC demand, particularly in Eastern Europe, was well done.
Now, Taiwanese wire Digitimes said that the manufacturers are looking to other market such as South East Asia and and Central and South America to make up the shortfall.
It’s not just lack of demand that is the problem because the margins the mostly Taiwanese companies are also taing a hit because of the parlous state of the Euro.
The notebook manufacturers can’t see light at the end of the tunnel in Europe until at least the end of the second quarter, the report adds.
The research wing of Digitimes believes that 221.4 million tablets will be shipped this year, and that’s a fal of 11.9 percent compared to 2014.
More tales of poor sales of PCs have emerged.
This time it’s Central and Eastern Europe (CEE) which are showing a decline, according to IDC.
Sales fell in 2014 by a rather whopping 14 percent, representing 18.55 million units – it’s the second year in a row that this region has declined.
Even notebook PC sales fell, by 14.5 percent year on year.
IDC said that sales were inhibited by currency fluctuations and poor economics, but even given that, there’s a fairly constant underlying trend worldwide.
Russia accounted for 42.6 percent of total PC shipments in the region last year, and IDC said the plummeting sales sales were accounted for by the poor economy.
However, the picture in places is not so dim. Some countries showed a rise in sales on the back of PC upgrades from Windows XP.
In particular, Poland, the Czech Republic and Romania all showed double digit growth in 2014.
The consensus is that the PC might not be dead but it is certainly struggling.
And in the third report of its kind we’ve published today, IDC said that until 2010 PCs had the lion’s share of the total smart connected devices market, accounting for around 52.5 percent of shipments with 44.7 percent for smartphones and only 2.8 percent for tablets.
But, said IDC, in 2014 smartphones represented 73.4 percent of total shipments, PCs slipped to 16. percent and tablets 12.5 percent.
That trend is continuing – by 2019 PCs will only represent 11.6 percent of that market, while tablets will have 10.7 percent.
This must all be deeply troubling for chip giant Intel, with revenues still depending on the good old X86 chip and seemingly unable to make inroads into the tablet and smartphone markets.
Here’s an IDC chart demonstrating the trend between 2014 and 2019.
There’s more bad news for the PC market as it appears that Google Chromebooks are taking market share in the low end and the education markets.
ABI Research said Chromebooks, which rely heavily on the cloud, start up much faster than Windows PCsand are pretty affordable too, have “gained traction” in the North American market.
And it’s not just home users who are buying them – organisations are buying them too, with shipments close to five million last year.
Analyst Stephanie Van Vactor said that cloud services and the collapse of economies worldwide were the impetus for designers and developers to create cheap and cheerful devices, like the Chromebook.
“Chromebooks were the result, and the ‘anytime anywhere” access to content is a mobile-centric game changer,” she said.
The education market in particular has a yen for Chromebooks, mostly because of Google Apps for Education, she said. The business and the education sector together accounted for 62 percent of Chromebook shipments.
Another factor is the price. The average selling price for a Chromebook is $226 in the States, while it’s $420 for a tablet – presumably an Apple iPad.
“Google has taken to heart the popularity of mobile devices and developed a personal computing device that is a functional solution,” said Van Vactor. She said: “This style of computing works for the on the go lifestyle people are becoming accustomed to and will continue to impact the future of computing as the market shifts and changes.”
The outlook for PCs looks pretty grim in 2015, according to data released by Gartner.
The market research outfit said that PCs and ultra mobiles will deliver revenues of $226 billion this year, but that will be a 7.2 percent decline.
You have to take the current strength of the US dollar into account, Gartner warned, but even after that, the global market will show a 3.1 percent drop during the year.
Gartner forecasts that so called traditional PCs – that includes desktops and notebooks – will fall from 252,881,000 units this year, to 236,341,000 units in 2017.
The firm said that PC vendors are raising their prices to stay profitable but this is having a Catch 22 effect because it’s forcing customers to keep their purses tightly closed. Home users are also not expected to lash out on new devices.
Mobile phones will grow by 3.5 percent during this year and Gartner believes that rather than buy PCs, people will buy smartphones instead. Tablet sales will suffer because of that.
Roberta Cozza, a research director at Gartner, said: “Following rapid growth, the current mature consumer installed base for tablets is comparable to that of notebooks. Not only is the tablet segment nearing saturation in mature markets, but the influx of hybrids and fabulist will compete directly with tablets in emerging markets.”
She seems to think that despite Apple’s high prices, many users of high end Android devices will move to iOS.
There’s still no light at the end of tunnel for PC sales, market research company IDC has predicted.
It estimates that world wide shipments of PCs will drop by 4.9 percent this year, but it suggests things may be slightly better in 2016 and 2017.
Total shipments of PCs this year are expected to total 293.1 million, but the underlying trend remains poor.
IDC said that some sectors of the market saw an uptick in demand during the second half of last year, but volumes were up because the supply chain was inflated by Microsoft’s plan to cut subsidies in its Windows 8.1 + Bing scheme early this year.
The strong US dollar makes PCs more expensive and there’s a continuing move to other form factors. Intel won’t release its Skylake processor and Microsoft won’t ship Windows 10 until later this year, so many will wait buying until they see which particular writing is on the wall.
Emerging markets don’t offer much either. IDC said that these markets ended 2014 with a decline of 9.5 percent in PC shipments.
Loren Louverde, VP of PCs at IDC, said opportunities for long term growth depend largely on growth in the emerging market. “That seems unlikely with the shift towards mobile devices. Vendors can focus on growth segments of the market such as All in One, slim and convertible PCs, or consolidate share, but pressure on pricing and from competing devices will continue to make it a challenging market.”
Dell said it has
extended its ProSupport Plus service for both PCs and for tablets.
The company claimed it’s the first to offer proactive and predictive support for these devices.
It also claimed that with this package in place, people will spend up to 84 percent less time on technical support calls.
The company claimed that IT departments spend around 80 percent of their time on routine operations and support.
The service will be available to both Dell customers and to its channel partners – and includes cover for a number of situations.
Those include coverage for drops, spill and electrical surges; hard drive retention after replacement and workflow management for support cases, as well as self service case management and parts dispatch.
While the conventional
Windows PC market continues to decline, it appears to be losing market share to Apple’s range of PCs.
That’s the conclusion of Taiwanese vendors who have told local wire Digitimes that global PC shipments are expected to fall by over three percent during 2015.
Apple, on the other hand, is set to do much better, with growth of between 10 and 15 percent during 2015, amounting to shipments of between 20 and 23 million worldwide.
Apple is gaining additional traction from more competitive prices and Digitimes said it expects the company to drop prices on its 11 inch and 13 inch notebooks when it launches a 12-inch Macbook Air this year.
While traditional PC sales have been hit by smartphones and tablets to some extent, Microsoft’s delays in shipping Windows 10 will also not help sales.
Microsoft is responding to vendors’ complaints about the excessive price of licensing its operating system by introducing aggressive pricing in a bid to boost the market during 2015.
Where once the
global flat panel industry focused on unit growth, it appears that it is now taking a bigger interest in area demand.
Market intelligence company IHS said that last year, display panel shipments grew to 168.9 million square metres.
That’s up by nine percent compared to the year before, and will grow at five percent CAGR to reach 223.6 million square metres in 2020.
Bigger is now better, according to Yoshio Tamura, director of research for IHS. “There were four major driving forces,,, consumer demand for larger LCD TVs, soaring demand for five inch and larger smartphones, larger automotive display screens, and larger tablet PCs.”
Major players in the PC business including Apple, HP, Lenovo, Acer and Asus have launched notebooks with larger screens.
Smartphones, particularly in the Chinese market and developing market, are fuelling demand for bigger screen sizes.
Sales of PCs
in Europe, the Middle East and Africa (EMEA) grew by two percent in the fourth quarter of last year.
Although that’s hardly a stellar figure, Western Europe showed better results with growth of 10.7 percent.
In all, shipments amounted to 93.3 million units.
IDC’s report said that the market grew because of healthier shipments to ordinary people in the quarter, with vendors stocking up for Christmas and January sales.
Next month, there will be Microsoft promotions which will bring prices down on notebooks with less than 15-inch screens.
HP, and Lenovo dominated the market place, with shares of 23.3 percent and 19.6 percent respectively.
Dell has 9.8 percent share in EMEA, followed by Acer, Asus and “others”.
The founder of hedge fund
Kynikos Associates is betting against Intel’s share price and has done so for the last six months.
Intel turned in quarterly results that disappointed Wall Street late last night.
According to Reuters
, Kynikos Associates founder Jim Chanos said he’d shorted Intel’s share for six months.
He believes that despite bullish talk from Intel about its future, the semiconductor giant faces similar challenges as companies HP and IBM did.
Intel’s mainstream business is selling X86 microprocessors used in PC, but as we reported earlier today, revenues from those devices fell in its financial fourth quarter.
Intel shares fell in after hours trading on Wall Street.
Shipments of PCs
during any fourth quarter used to be strong until two years ago.
But figures released by Gartner said that worldwide PC shipments grew by a miserly one percent during the last quarter of 2014.
Shipments amounted to 83.7 million units and analysts at the company think the results are a “slow but consistent improvement after two years of decline”.
Tablets had been responsible for displacing PCs but that peaked in 2013 and the first half of last year.
People are drifting back to PCs, said Gartner, although different regions showed different results.
The US market showed the highest growth and the European region was strong too.
Lenovo is now the worldwide leader in shipments with 19.4 percent of the market, followed by HP and Dell. Acer and Asus were fourth and fifth.
HP showed growth of 16 percent in the quarter, while Lenovo’s growth slowed.
The chief driver for sales were mobile PCs including thin and light. Prices around the $300 mark helped boost sales.
The arrival of Windows
10 and the introduction of 14 nanometre microprocessors are unlikely to stimulate much demand for PCs in 2015.
That’s the view of Digitimes
– which has interviewed sources in the supply chain that make kit using the software and components.
Windows 10 is delayed – it’s not now expected to ship until the August at the earliest, and will make use of a future 14 nanometre CPU from Intel which is codenamed “Skylake”.
But the wire thinks that in 2015 only 200 million PCs will ship this year – with smartphones and tablets continuing to erode market share.
The manufacturers in Taiwan are more update about Apple based PCs rather than their Windows based cousins and are anticipating that while enterprises may decide to upgrade.
Windows 8 has triggered a distinct lack of excitement in the marketplace, with many enterprises hanging on to Windows 7 systems for dear life.
Windows 10 is expected to look a lot more like Windows 7 than Windows 8.x.