PC worldwide shipments drop but Apple units grow

EMEA totaled 22.5 million units in the fourth quarter of 2015, a decline of 16 per cent year-over-year

Blame it on the free upgrades to Windows 10 or older computers that are good enough to last another year, shipments of personal computers in 2015 have registered a serious drop - as one research firm that released the data put it the largest drop in history.

Research firm International Data Corporation (IDC) and Gertner, both released their annual estimates for shipments and the numbers have shown a serious drop. While IDC says the numbers dropped by 10.4 per cent - the biggest drop  ever, Gartner has estimated that shipments dropped by 8 per cent.

While IDC data put the total number of PCs shipped in 2015 at 276.2 million, Gartner has marked it at  288.7 million units of total shipments, a difference of almost 12.5 million.

As IDC put it the last quarter of 2015 saw PC shipments worldwide totaled 71.9 million units, a drop of 10. 4 per cent, while Gartner put the last quarter numbers at 75.7 million units, a 8.3 percent decline from the fourth quarter of 2014.

Shipments to Europe Middle East and Africa registered the largest drop.

According to gartner, PC shipments in EMEA totaled 22.5 million units in the fourth quarter of 2015, a decline of 16 per cent year-over-year.

Although Lenovo, HP and Dell continued to remain the top three brands in terms of total number of shipments worldwide, Apple scored over the other in terms of yearly growth.

"Apple effectively tied ASUS for the number 4 position in the fourth quarter, but was clearly ahead on an annual basis. The company continued its strong run and outperformed the market, increasing its share globally to 7.9 per cent for the quarter and 7.5 per cent for the year," the IDC report said.

"Consumer sentiment toward PCs remains a challenge, though clearly there are pockets of growth," said Jay Chou , Research Manager, IDC Worldwide PC Tracker. "Even as mainstream desktop and notebooks see their lifetimes stretched ever longer, Apple's emergence as a top 5 global PC vendor in 2015 shows that there can be strong demand for innovative, even premium-priced systems that put user experience first," he adds.

IDC says the results are not totally surprising and total shipments were in line with already conservative expectations. However 2015 has ended up as the first year below 300 million units since 2008.

"The PC market remains competitive and the economic environment weakened further with the recent drop in the Chinese stock market," said Loren Loverde, IDC Vice President, Worldwide PC Tracker.

The downfall was contributed by all regions.  “All regions registered a decrease in shipments. Currency devaluation issues continued to impact EMEA, Latin America and Japan,” Ms. Kitagawa said. “Collectively EMEA, Japan and Latin America saw their markets reduced by nearly 10 percent in 2015,” says Mikako Kitagawa, principal analyst at Gartner.

Why are PC sales dropping

Various reasons have been blamed for the downfall including free Windows 10 upgrades, better hardware that did not warrant a replacement and increased competition from smart phones and tablets.

"The PC market continued to face persistent challenges from longer-PC lifecycles and competition from mobile phones and tablets, despite the slowing growth in those markets. However, economic issues like falling commodity prices and weak international currencies, as well as social disruptions in EMEA and Asia/Pacific that disrupted foreign markets were a larger factor for 2015," the IDC report notes.

According to the research firm changes in the OS market also had a significant impact. While 2014 saw sales and shipments increase due to the the end of support for Windows XP and promotions of low-cost PCs. In 2015 saw the launch of Windows 10 and a free upgrade program that delayed new system purchases. "Lastly, while some very attractive new PCs have been launched, the market is taking some time to respond to new OS and hardware configurations – deciding when to upgrade and evaluating slim, convertible, detachable, and touch variations vs. more traditional PCs," the IDC report said.

Gartner says unlike previous years people may not be buying PCs anymore as gifts. “Holiday sales did not boost the overall PC shipments, hinting at changes to consumers’ PC purchase behavior. On the business side, Windows 10 generally received positive reviews, but as expected, Windows 10 migration was minor in the fourth quarter as many organizations were just starting their testing period,” says Kitagawa.

According to him the decline started in 2012  with the launch of tablets and has continued to prevail. “In 2015, local currency devaluation also played a key role in the market conditions,” Kitagawa said. “EMEA, Latin America and Japan faced a major impact from the devaluation, showing double-digit declines in 2015. In contrast, the U.S. and Asia/Pacific experienced minor declines of almost flat to low single-digit declines as the currency issue did not affect these regions.”

2016 holds no major promise

Both research firms are predicting a slightly better performance in 2016 with sales picking up marginally thanks to a growth in hybrid models and better Windows 10 experience.

According to IDC the impact for 2016 will be larger as detachable tablet volume grows, boosting earlier forecasts of PC growth in 2016 from -3.1 per cent to growth of 1 to 2 per cent.

Gartner’s outlook for PC shipments in 2016 is for a decline of 1 per cent compared with 2015, with the potential for a soft recovery in late 2016. AS Kitagawa pointes out the PC market is still in the middle of structural change which will reduce the PC installed base in the next few years.

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