2016 PC Sales - Down again for the 5th year - but some signs of stabilization
On Jan 11, IDC posted their 2016 Q4 PC Sales based on their Worldwide Quarterly Personal Computing Device Tracker.
As I had discussed in posts earlier this year I was estimating a 250 - 260M unit market for 2016 and we came in @ 260.1M. 2015 finished with 275M units so a 5.7% decline. This marks the 5th straight year of sales declines and I don't expect that to change.
The rankings are pretty much the same as expected. Lenovo, HP and Dell are the top 3 with 21.3% (55.5M units), 20.9% (54.2M units) and 15.7% (40.7M units) market share respectively. Of the 3 Dell and HP showed small growth at 4.3% and 1.3% while Lenovo saw a 3.0% drop.
Asus and Apple are #4 and #5 with 7.4% (19.2M units) and 7.1% (18.4M units) respectively. Asus saw a small drop of 0.8% in 2016 but Apple saw a 9.8% drop. These two had a market share of 7.9% each at the end of 2015.
The "Others" category continues to drop rapidly. In 2016 this group saw a 16.1% decline in sales from 86.1M units to 72.0M units and a market share decline to 27.7% from 31.2% in 2015. As I've mentioned this segment of the market will continue to see dramatic declines as the industry continues to consolidate. The question here is who will pickup that share. Microsoft is one of the players in the Others category, but I expect MS to continue in the 1.1 - 1.3M unit / year slot.
Looking at just Q4. There are some signs as IDC calls out of some stabilization as the top 3 showed sales growth of 1.7% (15.6M units), 6.6% (15.1M units) and 8.2% (11M units) respectively. This was reflective of a pretty good holiday season.
A couple of other trends in 2016 included a focus on more high end devices and an increase in unit prices to offset lower volume. The new MacBook Pro and Microsoft Surface Book and Surface Studio were good examples of this.
From a technology standpoint, Intel Kaby Lake, M.2 based SSD and expansion slots are now the norm in many laptops along with FHD, QHD and even UHD displays. Battery life increases are still inching forward but thin is in - so you're seeing like for like performance from devices that are in some cases half the height and less weight than you saw just 2 or 3 years ago.
The big question is will the market "recover" in 2017 ? So it really depends on what you call recovery. A lot will depend on the corporate market. And there we are seeing interesting trends - especially with Windows based PCs.
Microsoft effectively has a Windows 7 problem and that problem is that corporate customers aren't migrating to Windows 10 from 7. According to NetMarketShare, in January of 2015, Windows 7 market share was 55.9%, in 2016 it was 52.4% and in 2017 is was 48.3%. Windows 10 share as of Jan 2017 is at 24.3%.
Windows XP and 8 have dropped off to less than 10% each, but 7 which is a mainstay of a lot of corporate organizations is not moving down as quickly as MS would like.
Windows 7 will hit 8 years old this July. A lot of the problem is actually driven by aging corporate applications that require older version of IE and companies augmenting or replacing their "desktop" environments with VDI technologies. This means they in some cases they are holding on to their desktop devices longer. And so while in most cases these assets have been fully depreciated, there is no catalyst to replace them and if so sometimes it is with ThinClient devices - many of which are actually running Windows 7 or 8 embedded.
So back to the original question - what will PC sales look like for 2017 ?
So my expectation is we will continue to see a drop in unit sales. I don't expect a dramatic drop - but we'll probably see around 245 - 250M units sold - so another 4% - 6% drop. A lot of that drop will come from the "others" category as that group will continue it's sharp decline. I don't expect are any dramatic changes in the top 5. If any of the top 5 see a big drop it may be Apple. The reception to the new MacBook Pros was not that great and while there are some refreshes planned in 2017, I expect to see less models and higher prices with not as much innovation. The Mac is a rounding factor in Apple's overall revenue and so i think their focus is more on iPhone which has also seen it's market share declining.
Bottom line - PC sales were 260M for 2016 a 5.7% decline over 2015 and I expect a similar decline in 2017.
As I had discussed in posts earlier this year I was estimating a 250 - 260M unit market for 2016 and we came in @ 260.1M. 2015 finished with 275M units so a 5.7% decline. This marks the 5th straight year of sales declines and I don't expect that to change.
The rankings are pretty much the same as expected. Lenovo, HP and Dell are the top 3 with 21.3% (55.5M units), 20.9% (54.2M units) and 15.7% (40.7M units) market share respectively. Of the 3 Dell and HP showed small growth at 4.3% and 1.3% while Lenovo saw a 3.0% drop.
Asus and Apple are #4 and #5 with 7.4% (19.2M units) and 7.1% (18.4M units) respectively. Asus saw a small drop of 0.8% in 2016 but Apple saw a 9.8% drop. These two had a market share of 7.9% each at the end of 2015.
The "Others" category continues to drop rapidly. In 2016 this group saw a 16.1% decline in sales from 86.1M units to 72.0M units and a market share decline to 27.7% from 31.2% in 2015. As I've mentioned this segment of the market will continue to see dramatic declines as the industry continues to consolidate. The question here is who will pickup that share. Microsoft is one of the players in the Others category, but I expect MS to continue in the 1.1 - 1.3M unit / year slot.
Looking at just Q4. There are some signs as IDC calls out of some stabilization as the top 3 showed sales growth of 1.7% (15.6M units), 6.6% (15.1M units) and 8.2% (11M units) respectively. This was reflective of a pretty good holiday season.
A couple of other trends in 2016 included a focus on more high end devices and an increase in unit prices to offset lower volume. The new MacBook Pro and Microsoft Surface Book and Surface Studio were good examples of this.
From a technology standpoint, Intel Kaby Lake, M.2 based SSD and expansion slots are now the norm in many laptops along with FHD, QHD and even UHD displays. Battery life increases are still inching forward but thin is in - so you're seeing like for like performance from devices that are in some cases half the height and less weight than you saw just 2 or 3 years ago.
The big question is will the market "recover" in 2017 ? So it really depends on what you call recovery. A lot will depend on the corporate market. And there we are seeing interesting trends - especially with Windows based PCs.
Microsoft effectively has a Windows 7 problem and that problem is that corporate customers aren't migrating to Windows 10 from 7. According to NetMarketShare, in January of 2015, Windows 7 market share was 55.9%, in 2016 it was 52.4% and in 2017 is was 48.3%. Windows 10 share as of Jan 2017 is at 24.3%.
Windows XP and 8 have dropped off to less than 10% each, but 7 which is a mainstay of a lot of corporate organizations is not moving down as quickly as MS would like.
Windows 7 will hit 8 years old this July. A lot of the problem is actually driven by aging corporate applications that require older version of IE and companies augmenting or replacing their "desktop" environments with VDI technologies. This means they in some cases they are holding on to their desktop devices longer. And so while in most cases these assets have been fully depreciated, there is no catalyst to replace them and if so sometimes it is with ThinClient devices - many of which are actually running Windows 7 or 8 embedded.
So back to the original question - what will PC sales look like for 2017 ?
So my expectation is we will continue to see a drop in unit sales. I don't expect a dramatic drop - but we'll probably see around 245 - 250M units sold - so another 4% - 6% drop. A lot of that drop will come from the "others" category as that group will continue it's sharp decline. I don't expect are any dramatic changes in the top 5. If any of the top 5 see a big drop it may be Apple. The reception to the new MacBook Pros was not that great and while there are some refreshes planned in 2017, I expect to see less models and higher prices with not as much innovation. The Mac is a rounding factor in Apple's overall revenue and so i think their focus is more on iPhone which has also seen it's market share declining.
Bottom line - PC sales were 260M for 2016 a 5.7% decline over 2015 and I expect a similar decline in 2017.
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