PC mkt shows different trends at low-end and high-end strata

MUMBAI, INDIA: The PC industry is showing new changes as per some latest bean-counting. In the U.S. market, PC shipments totaled 15.9 million units in the second quarter of 2014, a 7.4 per cent increase from the second quarter of last year. This was the second consecutive quarter of year-on-year shipment growth. Both desktop and notebook PCs exhibited an increase in shipments.

"The consumer PC market also started picking up in the U.S. The availability of affordable, thin and light notebooks have drawn consumers' attention," Mikako Kitagawa, principal analyst at Gartner said. "Touch enable devices are also widely available with decreasing price premiums compared to a year ago. The price premium is low enough for mainstream consumers to spend the extra money for the additional functionalities, such as touch."

In Asia/Pacific, PC shipments totaled 24.6 million units in the second quarter of 2014, a 9.5 per cent decrease from the second quarter of 2013. Despite the decline in shipments, there are some signs of stabilization, with minimal declines and flat growth in mature Asia/Pacific countries and China.

However, the low end of the notebook PC market continues to be challenged by the popularity of phablets and voice connected tablets, especially in smaller cities where some lower income groups prefer a larger screen phone as their only device for communication and access to the Internet.

Worldwide PC shipments have totaled 75.8 million units in the second quarter of 2014, a 0.1 per cent increase from the second quarter of 2013.

"While the worldwide PC market stopped two years of declining shipments in the second quarter, there were mixed results, as stabilization in developed markets was offset by a decline in emerging markets," said Mikako Kitagawa, principal analyst at Gartner. "The PC industry in emerging markets has been impacted by the allure of low-cost tablets. These low-cost tablets continue to take spending from new PC units, meaning that it will take more time for PC sales to stabilize in emerging markets.

"The PC market's installed based has been declining as buyers switched to tablets and smartphones for entertainment and social media consumption. The 2Q14 results suggest that the consumer installed base restructuring peaked during 2013. We are seeing a slowdown in premium tablet sales, which have already penetrated a large number of households. PCs are now growing off a smaller installed base of newer devices, with more engaged users. Therefore, we expect to see slow, but consistent, PC growth. While the end of support for Windows XP drove some of the sales in developed markets, it is the underlying business replacement cycle that will stabilize the market."