Last year was a challenging one for PC sales in Europe.
While growth in 2014 had benefited from XP migration projects and the launch of products featuring Microsoft’s Windows with Bing OS, these drivers disappeared in 2015 and the year-on-year comparison suffered.
Demand was also affected by a weakening euro and the resulting rise in average PC prices. Finally, a build-up of excess PC inventory during the first half of 2015 presented a major challenge to the channel at a time when warehouses should have been clean in preparation for the launch of Windows 10.
These weak market conditions did not fail to leave their mark on distributor sales in the course of the year.
While Context data shows that PC sales in the first half of 2015 were still up by 6.5 per cent compared with the same prior-year period in western European distribution, they dropped by -1.3 per cent in the second half.
UK distribution fared better than the western European average in terms of PC volume growth. Buoyed by faster product replacement cycles, lower price levels, strong Black Friday sales and a holiday season that saw sales driven by price promotions, PC sales across UK distribution were up by a healthy 26.3 per cent year on year in the first half of 2015 and continued to see growth, of 10.7 per cent according to Context figures, in the second half.
Certainly, it can be argued that some of the latter was down to stock-clearance activities. October for example, which registered a 24.1 per cent year-on-year growth in distribution in the country, still saw a high share of Windows 8.1 notebooks in its sell-through, coupled with a significant drop in average pricing for these compared with September.
There is, however, a category that significantly contributed to the good Q4 2015 growth performance in the UK channel independently of stock clearing: the new detachable and convertible mobile systems. While these mobile form factors have been around for some time now, they have only recently started to sell in more significant volumes and to contribute noticeably to growth.
According to Context data, detachable and convertible systems combined increased by 140.8 per cent in UK distribution in Q4 2015 compared to the prior-year period, albeit from a small volume base (see Fig 1 below).
Detachables, defined here as portables that can be used in slate or notebook mode and come standard with a detachable screen, posted the stronger growth and saw sales increase by 219.9 per cent compared with Q4 2014.
Convertibles, defined by Context as portables that can be used in either slate or notebook mode but where the screen is not detachable, were up by 95.1 per cent during the period. While volumes for the new mobile form factors were still relatively small, Q4 2015 was the first quarter to see them represent a sizeable chunk of the market.
When looking at them as part of the notebook segment, they represented a combined 13.5 per cent of notebook sales through UK distribution during the holiday season.
With most of them targeted at consumer usage, they held an even higher share, of 17.7 per cent, of consumer notebook sales (see Fig 2 below).
The reasons for the recent, growing popularity of new mobile form factors vary. One reason is the increase in product variety, which has also led to a decline in average sell prices, making these products more interesting to end users.
Growth has also been driven by users who were disappointed by the limited content creation capabilities of their slate tablets, and opted for a hybrid instead of refreshing their slate.
Looking forward, with usage scenarios becoming more clearly defined, product variety continuously increasing, and Windows 10 allowing for a strong user experience, both the detachable and the convertible segment are expected to continue to grow.
Marie-Christine Pygott is Senior analyst at Context
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