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Windows 10 not enough to push PC industry out of the pit

Posted: 20 Jul 2015 ?? ?Print Version ?Bookmark and Share

Keywords:IHS? Windows? PC industry? operating system? IDC?

There was a time when the release of a new Windows operating system would instigate a massive PC refresh cycle, boosting sales by double digit percentages. That may no longer be true. In fact, this year is shaping up to be another down year for PC sales, and even the release of Windows 10 later this month is unlikely to change that.

"The days when a new operating system drove a PC refresh cycle alone are kind of gone," said Craig Stice, senior principal analyst for computers, servers and storage at IHS.

In the face of changing consumer preferences for mobile computing platforms such as tablets and smartphones, global PC shipments have fallen for three consecutive years, according to Gartner. Stice and other analysts believe the trend will continue this year.

According to International Data Corp. (IDC), worldwide PC shipments declined 12 per cent in Q2. Shipments slipped to about 66.1 million, down from 75 million in 2Q14, the firm said.

Though the Q2 decline was larger than forecast, it was consistent with what was largely expected, according to Loren Loverde, VP of worldwide PC trackers and forecasting at IDC.

Stice of IHS said PC OEMs had a fairly conservative build plan for the first half of the year, in advance of Windows 10. "The OEMs are just going through a conservative inventory plan right now," Stice stated. "Prior to the launches [of Windows 10 and Intel's Skylake microprocessor] they want to have a minimal amount of inventory on the shelf so they can replace with newer technology."

Part of the reason that Windows 10 won't drive a huge refresh cycle for PCs is that, unlike previous versions of the OS, Microsoft is offering an upgrade path from previous Windows versions to Windows 10.

Analysts do expect that Windows 10 and Skylake, expected to be available next month, will give a boost to PC shipments. But, in Stice's words, it won't be enough to "dig it out of the hole" that sluggish H1 shipments put the PC market in.

"We continue to expect low to mid-single digit declines in volume during H2 with volume stabilising in future years," IDC's Loverde said. "We're expecting the Windows 10 launch to go relatively well, though many users will opt for a free OS upgrade rather than buying a new PC. Competition from 2-in-1 devices and phones remains an issue, but the economic environment has had a larger impact lately, and that should stabilise or improve going forward."

But Stice noted that the H2 is always better than the H1 for PC shipments, largely because it includes both the back-to-school period and the holiday season. While he expects PC shipments to be down for the year in the low- to mid-single digit percentage range, he does believe that the marketing campaigns from Microsoft and PC OEMs around Windows 10 will drive some exposure for PCs in general. Windows 10 is "not expected to drive a major refresh, but it will get people's attention," Stice said.

And the PC industry might be further helped by new platforms, such as 2-in-1s, that give PC OEMs room to differentiate, according to Stice. "The expectation is that we will see a new wave of products coming out with Windows 10 in 2H15," he added.

So, while Windows 10 and Skylake will both give PC shipments a bit of a lift, they are unlikely to lift the industry out of a fourth consecutive year of declining shipments. And while many analysts still hold out hope that the market may grow in future years, it very well might be that PC shipments will never again reach their peak of nearly 353 million shipments achieved in 2012.

- Dylan McGrath
??EE Times





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