IDC also suggested that the arrival of Windows 10 would “support the Windows ecosystem, including some replacements” but by providing a better experience with mouse and keyboard, it will effectively relieve the “pressure to move toward touch, and support non-PC devices like 2-in-1s, likely without boosting total PC shipments significantly”.
Currency matters
By contrast, shipments of tablets and clamshells are set to increase, according to Gartner, by almost 22% to 276 million units in 2017 and smart phone shipments to increase by 3.5% this year. Roberta Cozza, research director at Gartner, predicted that buying a new smart phone would be more of a necessity to customers than PCs (or tablets, for that matter). “Consumers will continue to prioritise spending on phones over PCs and tablets in 2015,” she stated.
On the subject of tablets, Cozza said the tablet segment was nearing saturation in mature markets but argued that an increasing percentage of users of high-end Android devices would move to Apple’s iOS. “Android vendors at the high end are finding it hard to differentiate and add value beyond technology and features,” she said. “Furthermore, Apple’s brand clout and ecosystem – alongside the new large-screen iPhone models – are strong alternatives. We also estimate that, despite Apple’s premium price tags, the iOS base replacement cycle that started in the fourth quarter of 2014 with the larger iPhones will carry on into 2015.”
“We expect businesses will delay purchases of new PCs and consumers will delay or ‘de-feature’ their purchases” – Ranjit Atwal
In addition to the lack of a compelling reason for people to upgrade their PCs, the market is also being hit by another factor which could slow down PC sales: currency. The strength of the dollar is causing all kinds of pricing problems for US vendors selling product into EMEA. Highlighting the issue, Ranjit Atwal, research director at Gartner said “expected price increases by vendors in Europe and other regions, which is forced by local currency depreciation against the dollar” would affect PC purchases.
He stated that the currency squeeze was “forcing PC vendors to increase their prices in order to remain profitable and, as result, it is suppressing purchases. We expect businesses will delay purchases of new PCs and consumers will delay or ‘de-feature’ their purchases”. But he stressed the reduction in purchasing was “not a downturn, it is a reshaping of the market driven by currency”.
Atwal’s argument that the PC market is not experiencing a downturn as such but “a reshaping of the market driven by currency”, does not quite square with the fact that Intel specifically referred to the XP situation as well as currency in its statement on first quarter revenues.
But there is no doubting the impact of the euro’s fall against the dollar. The euro has suffered from a rapid deterioration against the dollar since the start of 2015. For most of 2013 and 2014, it was trading at $1.30 or above, but then it started to drift down closer to $1.20 in October 2014. By the end of the year it was down to $1.21 compared to $1.37 at the start of 2014, that’s a decline of almost 12%. In March 2015, it was at $1.09 and there are some who believe it could soon achieve parity with the US currency.
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