Complex Made Simple

Is there a PC market revival? A new trend is playing out to be a savior

The PC market has been ailing for years, but a certain portion of consumers have proven its saviours, but only to a certain extent.

2018 marked the seventh consecutive year of declining sales for the PC industry In the EMEA, the traditional PC market declined 5.8% year-on-year The largest PC manufacturers are the only ones to come out of this happy

If the 2010s will be known in the coming years for a particular technology, it might be tablets, or personal assistant devices (e.g. Amazon Echo), or maybe phablets. Regardless, it certainly wouldn’t be personal computers (PCs).

So, what’s been chipping away at the PC market, and is there a sliver of hope for the market?

7 years of decline

In 2017, global PC shipments dropped to their lowest level since 2006, according to Statista. A forecast released in mid-2018 by research firm Gartner predicted another year of decline by the end of the year.

According to Gartner’s estimates, PC vendors shipped a total of 259 million computers in 2018, down from 263 million the year before, with 2018 marking the seventh consecutive year of declining sales for the PC industry.

“Shipments were down almost 30% compared to 2011, the apparent peak of the PC era,” Statista said.

The GCC market has been similarly affected.

According to the International Data Corporation (IDC), the Europe, Middle East, and Africa (EMEA) traditional PC market (desktops, notebooks, and workstations) came in negative in the fourth quarter of 2018, with the market declining (-5.8% YoY) and totaling 19.6 million units.

So what caused this? 

The culprits behind the decline of PCs are your usual suspects: smartphones/phablets, tablets, home assistants and other devices that have been eating away at the features and utility of personal computers. The same way smartphones consolidated devices like cameras, clocks and calculators into one product, they have also allowed consumers to browse the internet, listen to music, download/upload files and more, virtually making the PC obsolete to the most casual of users.

“The transition from personal computers (PCs) to mobile devices was largely driven by consumers looking for more convenience and flexibility, which a mobile device offered,” Sanmeet Kochhar, General Manager – Middle East at HMD Global, told AMEinfo in an interview.

When every device wants to do everything at the same time, things don’t become as clear cut as they once were. To survive becoming obsolete, televisions have had to become smart following the rising popularity of video streaming and social media, and are shipping remotes with their displays that come factory-ready with a YouTube and/or Netflix button.

Long gone are the days when this was cutting-edge technology. Image: Shutterstock.

With device utility and identity as muddled as it is today, it has proven very difficult for PCs to retain user interest and make themselves stand out. Sure, you need a PC to perform performance-intensive tasks such as video editing or 3D design, but for the majority of the population, this isn’t relevant.

On the business side of things, enterprises have been opting for cloud computing.

“With increasing numbers of SMB enterprises switching to cloud-based business solutions such as Microsoft Dynamics 365, the long-term prospects for standalone PCs continue to look ominous,” British IT consultancy firm GCC said on their site.

Small victories for the market?   

According to Statista’s data, there were signs of improvement in 2018 though.

“Not only did the decline slow down to 1.3%, but the international PC market actually returned to growth in the second and third quarter of the year before being hit by a shortage of CPUs towards the end of the year,” the statistics site said. “The impact from the CPU shortage affected vendors’ ability to fulfill demand created by business PC upgrades.”

According to IDC, this CPU shortage was caused by “aggressive stocking of inventory in anticipation of the shortage.” It was also caused by the uncertainty surrounding the international economic landscape in light of the US-China trade war, BREXIT, and other factors.

The PC market has a hero: Gaming PCs.

“Ultramobile, convertible and gaming devices showed strong signs of resilience this quarter, as their attractive designs and tailored use cases enabled them to garner sufficient consumer interest to drive growth,” IDC noted.

HMD’s Kochhar echoed this sentiment, having great faith in gamer purchasing power. He also believes innovation will drive the market in the coming years.

“Electronics manufacturers are increasingly relying on innovative new technology to drive consumer interest, including harnessing AI to transform the user experience,” he noted.

If there is a bit of positive news to come out of all this, it’s that the 3 most popular manufacturers are enjoying increased market share.

“The top-three vendors strengthened their positions across the world, with Lenovo, HP, and Dell accounting for 63% of global PC shipments in Q4 2018, up from 59% in the same quarter in 2017,” tech news site Computing said, citing data by Gartner.

It seems that for now, the biggest tech corporations are the only ones coming out happy from all this, while the rest having to contend with the declining market.