January 14, 2017

PC Market Decline Widens to 25% in Five Years despite Consolidation

By: Azhar Azam

Gone are the days of Compaq and IBM, these days belong to Lenovo, HP, and Dell who dominate the declining worldwide PC market.

Lenovo emerged in top-5 PC market shareholders in 2004 with a share of 6.8% and gradually paced itself into the global market leader with a market share of 21.3%, shipping 55.5 million units in 2016.

Although between 2006 to 2010, Lenovo was stalled at 4th place despite continuously increasing market share but in 2011 and 2012, it jumped to 2nd spot powering Acer and Dell behind. Since 2013, top position is now retained by Lenovo for the 4th consecutive year in worldwide PC shipments besides accumulating its market share.

According to Gartner, a total of 269.7 million units were shipped in 2016 against 287.6 millions in 2015, showing a year-on-year decline of 6.2% while IDC data posted a drop of 5.7%,down from 275.7 million units in 2015 to 260.1 million in 2016. In the last five years, grim PC market has cumulatively suffered a sharp decline of a terrible 25% approximately.

Gartner data includes desk-based PCs, notebook PCs, and ultra mobile premium (excluding Chromebooks or iPads) whereas IDC traditional PCs include desktops, notebooks, and workstations (excluding Tablets and x86 Servers).

Where mobile phone and tablets are outperforming the growth of PC market, long-PC lifecycle is also challenging its market expansion. Economic issues such as falling currency value, turbulent Middle East scenario, China stock turmoil, fierce competition and high inventory levels in the channels are all-together rebuking the PC market across the world.

According to the data by Gartner, PC market has shrunk by 14.2% in the last two years whereas IDC figures present that the market has condensed by 16.2% for the same period. At one time, from 2003 to 2008, the PC shipments levitated by 89.4% just in six years at an average of 14.9 percent but its all history now!

The worldwide PC market is now yet to grow for five straight years, since 2011 when the market expanded by a meager 0.5% after an affluent growth of 14.7% in 2010. In terms of units, PC market witnessed its boom in 2011 with highest ever units shipments recorded at 352.8 million whereas in terms of growth, 2003 was the year when the market grew by 27.6%, largest growth ever.

 
Both Gartner and IDC data shows a fierce competition between Lenovo and HP for the leadership crown although so far Lenovo has managed to occupy the throne. Nonetheless HP also managed to substantially lower its decline to challenge Lenovo in 2016.

Dell is the only manufacturer that outperformed the PC market in 2016 and turned the tables showing a belligerent growth in 2016 in the shades of pessimism. Asus also improved on its market share under the negative growth of 2.6 percent/0.8 percent (Gartner/IDC).

Apple, on the other hand, sliced its strong 6.2% growth into 9.8% decline percent though survived to loosing much of its market share. Also, new MacBook Pro slightly reinstalled Apple back in the market during the last quarter of 2016.

Notebook/Laptop Market

Global Notebook shipments have also dropped viciously; from 175.5 million units in 2014 to 164.4 million in 2015, TrendForce reported last year. It further forecasted the Notebook shipments to slump to 159.2 million units in 2016, actual data to be released in February.


 Again in the worldwide Notebook market, there is an intense rivalry between HP and Lenovo; HP maintains the top slot, trailed by Lenovo while Dell is placed at No. 3 in this market too. TrendForce notebook analyst Anita Wang says “HP has a good chance of holding the most market share this year and maintaining its leadership position because of relatively stronger position in the US market”.

“Competing brands are waiting to take over Toshiba’s international market share as the Japanese brand may soon give up selling its notebooks abroad.”

Toshiba’s Notebooks share in global shipments is expected to contract to scanty 1.6% in 2016; down from 4.2% in 2015 and 6.6% in 2014. Scandal-hit Toshiba has already auctioned it medical unit to Canon and there have been rumors to merge its Notebook Division with Fujitsu and Vaio (Sony) last year.