The PC market shake-out that has already claimed the likes of Toshiba and Sony may not be over yet, despite signs the market is stabilising and even poised for growth.
That's according to Gartner, whose latest forecast predicts that the PC market decline will come to a halt this year before sales grow again in 2018 and 2019, albeit modestly.
Despite the relatively rosy prognosis, Gartner research director Ranjit Atwal warned that the consumer PC market has not yet bottomed out and claimed vendors reliant on this space remain in danger.
"I think there will probably be one more shake out to come," he said. "I don't see anything happening to the top three [Lenovo, HP and Dell] over the next few years, but the pressure will still be on the ones below that as they have more exposure to the consumer market.
"The business market never really collapsed - it was the consumer market that collapsed. We're not quite [at the bottom] on the consumer side."
PC (ie desktop, notbeook and ultramobile) unit shipments will fall from 270 million to 265 million in 2017, before rising again in 2018 and 2019 to hit 268 million and 273 million respectively, according to the analyst.
However, thanks to rising ASPs, from a revenue perspective sales will be essentially flat this year at $163bn, and will then grow to $166bn in 2018 and $169bn in 2019.
"The market is stabilising," Atwal said.
"It's still declining, but not at the rapid rate we've seen previously, and that's essentially because the professional market, as we expected, has seen an uptick due to Windows 10 migration. It looks like that will continue this year."
ASPs, which normally decline by 4-5 per cent each year, are actually up two per cent annually, representing a swing of about seven per cent, Atwal said.
"Unlike three or four years ago when it was probably the number-one criteria, pricing has fallen down the list. While it's still important, other things like performance and screen size are becoming relatively more important" - Ranjit Atwal Gartner
Part of this can be explained by higher component costs, with DRAM prices up 30-40 per cent since last year, Atwal said.
But it also reflects the fact that cheap and cheerful devices are out of fashion, he added.
"Unlike three or four years ago when it was probably the number-one criteria, pricing has fallen down the list," he said. "While it's still important, other things like performance and screen size are becoming relatively more important. Users on the business and consumer side are looking for more value, which bodes well."
This holds for mobile phones and tablets as well as PCs, with Atwal commenting that $50-$100 tablets are "not doing well".
Atwal pinpointed Acer as the type of vendor in the danger zone as consumers - as well as businesses - gravitate towards higher-spec machines. Sony sold its VAIO business in 2014, and Toshiba exited the consumer PC arena last year in a move predicted by analysts.
"We've seen a lot of consumer vendors leave - Toshiba; Sony; Samsung have come in and out," Atwal explained.
"[Acer] are surviving but their margins are pretty low," he said. "If you extrapolate the fact that consumers are moving away from the low end, that's where a lot of the business Acer does. So [the question is] how do they move themselves into the midrange and change the perception around their brand. I think there's still going to be a squeeze of the vendors at the bottom end if they are all going to move into the midrange."
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