The PC Market Has Now Declined for Five Years

Posted on January 12, 2017 by Paul Thurrott in Hardware, Windows 10 with 70 Comments

The PC Market Has Now Declined for Five Years

The PC market has now suffered from five straight years of decline, with PC sales hitting 265 million units for calendar year 2016.

In calendar year 2011, PC makers sold about 365 million PCs, so annual sales have contracted by almost 100 million units over those five years. Or by almost a third.

The question, as ever, remains: How low will it go? That is, will the PC market simply continue declining, or does this level off at some point?

Let’s see what the analysts are saying.

Gartner notes a “stagnation” in the PC market, and a “fundamental change in PC buying behavior.”

“The broad PC market has been static as technology improvements have not been sufficient to drive real market growth,” Gartner’s Mikako Kitagawa says. “There have been innovative form factors like 2-in-1s and thin and light notebooks, as well as technology improvements, such as longer battery life. This end of the market has grown fast, led by engaged PC users who put high priority on PCs. However, the market driven by PC enthusiasts is not big enough to drive overall market growth.”

IDC, for its part, says that commercial (e.g. business) demand for PCs is “stabilizing” and that the contraction of the consumer PC market has “slowed,” thanks to phone and tablet sales slowly or falling as well.

“The fourth quarter [2016] results reinforce our expectations for market stabilization, and even some recovery,” IDC’s Loren Loverde says. “The contraction in traditional PC shipments experienced over the past five years finally appears to be giving way as users move to update systems. We have a good opportunity for traditional PC growth in commercial markets, while the consumer segment should also improve as it feels less pressure from slowing phone and tablet markets.”

So there’s no agreement there. Gartner believes that the PC market will remain where it is, basically, while IDC sees room for modest growth in 2017. The good news? Neither of those is technically a decline, though of course reality has a way of catching up with these firms and their predictions. And it is perhaps notable that neither Gartner nor IDC elected to predict what PC sales will look like going forward.

That could still come. But my position, outlined a quarter ago in Health of Tech: The PC Industry, hasn’t changed: I expect the PC market to continue to contract over the long term, and the question isn’t whether that will happen, but rather at what speed it happens. Hopefully slowly.

 

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