Market declines continue as PC growth engine grinds to a halt

Market declines continue as PC growth engine grinds to a halt

"Vendors are struggling with exchange rate fluctuations which is making financial planning more difficult and forcing price increases."

Doshi adds that the notebook market fared better, but after two quarters of falling less than 1 percent, declines have now increased to 4 percent.

“The notebook category faces significant challenges for the rest of the year as Microsoft has restricted the Windows with Bing program to notebooks with sub 14-inch screen sizes,” he adds.

“Channel inventory has been building since Microsoft announced the change and this will need to adjust before significant orders return.

“Any price rises for Windows notebooks will play into the hands of Google who is making strides in improving Chrome OS for both consumers and businesses.”

Furthermore, the tablet market declined around 9 percent year-on-year to 45.6 million units, with market leaders Samsung and Apple experiencing double-digit shipment declines as demand for the category has cooled.

“The rapid growth in the tablet market has caused markets in Western Europe and North America to become highly penetrated and shipment volumes have started to decline,” Coulling adds.

“Growth in these markets now relies on consumer replacements or increasing business purchases, neither of which looks likely to pick up significantly in the coming quarters.

“We are continuing to see the tablet market slowing down in less penetrated markets, where large smart phones are now replacing tablets and other devices for accessing the internet.

“Smart phones with screen sizes larger than 5.5-inches made up 31 percent of shipments in China. As this segment grows, tablets under 8-inches are declining and make up just 41 percent of the Chinese tablet market this quarter compared to 66 percent a year ago.”

Hybrid and convertible shipments doubled year-over-year in Q1 2015, reaching 3.0 million units. Asus headed the market with 28 percent market share, followed by Lenovo and Acer with 19 percent.

The market for two-in-one devices is expected to continue to grow during 2015 as consumers become accustomed to new form factors.

In addition, Windows 10 will provide a better user experience when switching between tablet and notebook modes on these devices.

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