The PC Market And The 300 Million Mark

Today IDC predicted that the PC market will contract by 6% in 2014, and will continue to decline at least into 2018.

Unit volume according to IDC would slip from 315.1 million units in 2013, to 291.7 in 2018. The figures include traditional PCs — laptops, desktops, and so forth — but exclude Surface devices, Android tablets, and iPads.

In short, IDC’s predictions now expect PC sales to fall under the 300 million threshold. In December, it had a different take, predicting a 3.8% decline in PC shipments for the current year, and then for PC sales to become “slightly positive in the longer term.” That would have kept shipments above the 300 million unit mark in something like perpetuity.

What this implies is that something changed, causing IDC to change its prediction logic. So, what happened? IDC is plain: Emerging markets are not performing as expected. After noting that as a group, emerging markets performed as expected in the fourth quarter, “concerns about the impact of slower economic growth, the culmination of some large projects, and conservative expectations for factors like touch capability, migration off of Windows XP, as well as continued pressure from tablets and smartphones has further depressed expectations going forward.”

The group goes on to note that “emerging markets used to be a core driver of the PC market .” Weakness there led to a shaving of expected growth rates, changing IDC’s prediction of a PC market north of 300 million units and just shy this year of growth, to an industry that can’t stop its own decline.

It’s important to keep scale in mind. IDC’s change in its view of the PC market was modest, but as its former optimism was more mild than tepid, those small changes are key. Here’s IDC detailing the shifts in its model: “Overall growth projections for 2014 were lowered by just over 2%, and subsequent years were lowered by less than 1%.” And that kids, is the ball game.

It’s hard to find any sort of good news in the above, other than to say that as far as declines go, there doesn’t appear to be another 2013 on the horizon. And, given that IDC is putting this data out now, presumably it’s had a chance to test the temperature of the current quarter, which while likely weak, should not mirror the incredibly bad 13.9% decline we saw in Q1 2013.

As a final note, as Microsoft’s ramps Surface revenue over time, we should start to factor those sales into IDC’s numbers. For now, those unit numbers don’t move the needle.

300 million. That’s the threshold PCs don’t want to slip under. But if IDC is right, Geronimo.