The PC business can’t climb out of the four-year hole it’s dug for itself, researcher IDC said today.
Shipments of new personal computers will drop 10 percent in the fourth quarter—which is two-thirds over—IDC announced Monday, meaning that for all of 2015, shipments will have declined by 10.3 percent from 2014. The firm now expects all OEMs (original equipment manufacturers) to ship 276.7 million PCs this year, off the 308.2 million in 2014.
If IDC’s forecast is accurate, it would represent the largest one-year contraction of the PC industry since the research firm began tracking shipments in 1996, “besting” the 9.1% record decline of 2013.
IDC blamed the latest shrinkage in shipments on a variety of factors, ranging from the strong dollar to larger-than-expected OEMs’ and sellers’ inventories, for the ongoing problem getting systems off factory floors.
The macro reason, however, remained the same as in quarters, and years, past: Consumers have simply not bothered to buy new PCs to replace their increasingly-aging machines, using dollars, euros and pounds that might have previously been spent on a personal computer to instead buy smartphones and, to a lesser extent, tablets.
That’s not to mean the PC is dead—as in no longer used—argued IDC. “Despite the substantial shift in spending and usage models from PCs toward tablets and phones in recent years, very few people are giving up on their PC—they are just making it last longer,” said IDC analyst Loren Loverde in a statement.
Microsoft’s free Windows 10 upgrade—available to the hundreds of millions of PC owners worldwide now running Windows 7 or Windows 8.1—hasn’t helped. “The free upgrade ... enables some users to postpone an upgrade a little,” Loverde said.
But not indefinitely, he contended.
IDC stuck to its guns, and predicted that at least some consumers would eventually upgrade their PC hardware because of Windows 10. “Some consumers will use a free OS upgrade to delay a new PC purchase and test the transition to Windows 10,” Loverde said. “However, the experience of those customers may serve to highlight what they are missing by stretching the life of an older PC, and we expect they will ultimately purchase a new device.”
Research firms like IDC and its rival, Gartner, have maintained that consumers will refresh their home PCs at some point, but their regular predictions of that have worn thin: The buy-a-PC timeframe has been repeatedly pushed out to a later date.
The silver lining in PC shipments, if there is one, exists because businesses have not—and for the foreseeable future, cannot—relinquish their workforce machines in near the numbers, or even percentages, of consumers. Businesses still regularly upgrade systems, albeit often on a lengthier schedule than previously, typically as they migrate to a new OS.
“Once commercial adoption of Windows 10 accelerates, and in combination with upgrades to steadily-aging consumer PCs, we expect demand for new PCs to improve for several years as replacements will also be boosted by the end of support for Window 7, just as the end of support for Windows XP boosted shipments in 2014,” IDC maintained.
Microsoft has set Windows 7’s retirement date as Jan. 14, 2020.
Other analysts have opined that enterprises, having learned their lesson from the scramble to dump Windows XP in 2013-2014, will be more likely to replace Windows 7 with Windows 10 before the due date arrives. At the same time, Microsoft has been aggressively promoting Windows 10 as ready for corporate adoption, even though the operating system has been out for less than five months.
“Windows 10 could reach enterprises faster than previous releases, driving some commercial PC refreshes in the mid-term,” said Linn Huang, also of IDC.
IDC now forecasts that shipments will stabilize by the end of 2016, and grow through 2019. Even that prognostication, however, means that the bottom of the trough won’t come until next year, and the growth from that will be so minor that 2019’s shipments will remain below 2015’s.
This story, "Horrendous PC shipment decline in 2015 isn't going to end anytime soon" was originally published by Computerworld.