Global PC Sales Fall For Fifth Consecutive Year As Smartphones Steal Limelight, Dell And HP Grow Share

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If you were expecting to see a miraculous turnaround for the PC market in 2016, it didn’t happen according to Gartner. The research firm says that Q4 sales fell 3.7 percent compared to the same period in 2015 to 72.6 million. Worldwide PC sales fell to 269.7 million for the full calendar year, which marked a 6.2 percent decline compared to 2015. So, what’s behind this continued softness in PC sales, which has entered a fifth straight year of declines?

"Stagnation in the PC market continued into the fourth quarter of 2016 as holiday sales were generally weak due to the fundamental change in PC buying behavior," said Gartner principal analyst Mikako Kitagawa. "The broad PC market has been static as technology improvements have not been sufficient to drive real market growth.”

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Although we can’t be certain, that could be a thinly veiled reference to Intel, whose processor performance improvements have slowed to a crawl in recent years. Even Kaby Lake, which was just released for desktop platforms (along with a slew of new SKUs for mobile applications), has not really moved the yard stick much further than what we’ve seen with Skylake.

The bottom line is, if customers are content with the performance of their current PCs, there’s little need to plunk down cash for a new system. And with our increasingly reliance on smartphones to manage nearly every aspect of our digital lives, upgrading the family PC often takes a backseat.

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“Consumers in this segment have high dependency on smartphones, so they stretch PC life cycles longer,” Kitagawa continued. “This side of the market is much bigger than the PC enthusiast segment; thus, steep declines in the infrequent PC user market offset the fast growth of the PC enthusiast market."

Four of the top five PC OEMs actually saw shipment growth during Q4 2016. Dell showed the largest growth with a 5.4 percent increase, while Asus showed the largest decline, with 8.5 percent fewer units shipped. The top 5 ranked OEMs include market leader Lenovo followed by Hewlett-Packard, Dell, Asus and Apple. Those rankings were exactly the same for full year 2016 sales, with Lenovo shipping a total of 55.8 million PCs compared to 18.6 million for fifth place Apple.

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It should also be noted that traditionally strong PC buying opportunities during the year are quickly diminishing. “Big sales events, such as Black Friday, Cyber Monday and holiday sales are no longer effective marketing opportunities for PCs since PC purchases are generally driven by a 'need,' rather than 'want,' motivation,” added Kitagawa. “Vendors and channels did not have high expectations for the holiday PC sales, so the marketing campaigns remained relatively quiet."

Although we enthusiasts have plenty of reasons to be happy about 2017 thanks to the arrival of fresh hardware like Vega, Ryzen and Cannon Lake (by the end of the year), they'll be a drop in the bucket according to Gartner. “The market driven by PC enthusiasts is not big enough to drive overall market growth,” said Kitagawa.


Via:  Gartner
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