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TECHnalysis Research Blog Extra

January 13, 2017
PC Shipments Stumble but Turnaround is Closer

By Bob O'Donnell

The PC market faced another challenging year in 2016, as both IDC and Gartner reported the fifth annual decline for the category in separate news releases this week. The numbers vary between the two firms because of how they count Chromebooks and convertibles, but the tally is likely between 260 and 270 million—a 100 million unit drop from the peak of 365 million units in 2011.

On the surface, of course, this looks quite bad and, for many smaller players in the industry, it is. But it’s a different story for the largest PC providers. Market leaders Lenovo, HP and Dell accounted for just under 60% of the total in Q4 of 2016, up from about 56% just a year ago, and all three companies experienced year-over-year growth in the final quarter. HP and Dell also enjoyed year-over-year growth for the entire year. Apple and many smaller companies, on the other hand, including Acer, Asus and the “whitebox” market, all faced declines, some of which were rather large.

Another interesting part of the story is that average selling prices for PCs (at least in the US) have been rising. What this strongly suggests is that while the total number of people who want and are still buying PCs may be declining, their interest in and willingness to pay for PCs is growing. Given that total Q4 numbers were down just 1.5% year-over-year, according to IDC, this could certainly suggest a flattening and restructuring of the market. Moving forward, we’re likely to see a more rationalized (i.e., smaller) PC market, but one that features nicer machines from a smaller set of suppliers.

This view certainly seems to fit all the renewed interest and energy that the PC market has been experiencing lately. Between growing interest in higher-end gaming PCs equipped with high-quality GPUs from nVidia and AMD, along with growing interest in convertibles, 2-in-1s and other interesting form factors, and a potentially interesting renewed CPU performance battle between Intel and the reinvigorated AMD (thanks to their forthcoming Ryzen CPU), there are actually quite a few interesting developments happening in the PC market in 2017. Throw in some attention-grabbing new PCs from numerous vendors at the recent CES show, and a clearly established Microsoft Surface hardware business, and there’s actually quite a bit to be excited about in the PC market, even in spite of these tough sales numbers.

Here's a link to the column: https://techpinions.com/unpacking-this-weeks-news-friday-january-11th-2017/48508

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.

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