Total shipments of personal computing (PC) systems – desktops, notebooks, tablets, and Internet/cloud units – will continue to rise over the next several years despite a drop in desktop PC and notebook computer demand. Thanks in part to growing demand for touchscreen tablets, total PC system shipments are forecast to rise 12 percent in 2014, reaching 585 million units, followed by a nine percent increase in 2015, according to the latest research from IC Insights.
In terms of revenue, the total PC systems market is expected to grow five percent in 2014, reaching $295 billion, according to the IC Insights report. Over the forecast period of 2012 to 2017, the total personal computing market is forecast to rise by a compound annual growth rate (CAGR) of 3.4 percent with worldwide revenues reaching $327 billion in 2017.
Sales growth is much slower than unit shipment growth primarily due to steady declines in the average selling prices (ASPs) for standard PCs and lower cost mini-tablets with screen sizes of seven to nine inches, said IC Insights.
The market for standard PCs (desktops and notebooks) continues to be sluggish in 2014, after shipments fell nine percent in 2013 from an all-time high of 345 million shipments in 2012. As a result, IC Insights forecasts a five percent decline in shipments for these systems, falling to 298 million units in 2014. The market researcher only expects a one percent increase in 2015, reaching 302 million units shipped.
On the other hand, IC Insights expects tablet shipments to grow 39 percent in 2014, reaching 281 million units, followed by a 16 percent increase in 2015. IC Insights also expects shipments of Internet/cloud-computing “thin-client” units to grow in the double digits, increasing 22 percent in 2014 to about 6 million units worldwide followed by a 56 percent increase in 2015.
Over the forecast period of 2012 to 2017, total global personal computing system shipments are expected to increase by a CAGR of 9.4 percent, reaching 731 million units in 2017, according to IC Insights. Excluding tablets and thin-client cloud-computing systems, shipments of standard PCs are expected to decline by a CAGR of -2.7 percent over the five-year period.
“Clearly personal computing has forever changed with growth of tablets and other new platforms now superseding standard keyboard-based PCs,” said IC Insights. “Tablets and Internet/cloud-computing platforms are not only making up for declines in PC unit sales but also maintaining historical growth patterns in personal computing systems during changing economic cycles.”
IC Insights said it continues to expect tablet shipments to increase by a CAGR of 28.8 percent over the forecast period “despite valid concerns about tablet unit sales slowing due to the emergence of large-screen smartphones and owners waiting longer to replace their tablets with new ones.”
However, some market research firms expect tablet shipments to bottom out in 2014. "Tablets have been revolutionary in the sense that they have created demand for a new product category – one that competes fiercely with netbooks and regular notebook PCs. Yet in 2014, their novelty seems to have worn off,” said Caroline Chen, a notebook PC analyst with TrendForce, a Taiwan-based market intelligence firm, in a statement. “Prices have bottomed out. Low-price notebooks are stealing away tablet market share. As a result, branded tablets will experience negative growth for the first time this year." She expects a year-on-year decrease of 1.8 percent in shipments of brand-name tablets in 2014, reaching 153 million units.
Second quarter 2014 tablet shipment numbers from Strategy Analytics indicates good growth for tablets particularly in the low-cost arena. The market research firm indicates global tablet shipments reached 52.4 million units, up five percent, in the second quarter of 2014, despite lower shipments from Apple and Samsung, which were down on second quarter 2013 volumes. Still, Apple and Samsung held about 41 percent of the total tablet market in the second quarter, according to the report.
"The lack of new models from Apple clearly hurt the company's shipments, but we expect new products in the fourth quarter to reinvigorate shipments,” said Peter King, director of tablets, Strategy Analytics, in a statement. “While Samsung had a noteworthy quarter in Q1 2014, we suspect high inventory levels resulted in the fall in shipments in the second quarter. We expect both Apple and Samsung to have a stronger second half year with Q4 particularly strong due to new models and year-end seasonal promotion."
“White Box vendors capitalized on the demand for low cost tablets, with shipments up almost 2 million units over Q2 2013,” according to King.
Only Asus and Lenovo, among the top five ranked vendors, grew shipments over the second quarter of 2013. In the first fiscal quarter ended June 30, 2014, Lenovo became the third largest vendor with 2.3 million devices shipped, tallying a growth rate of 67 percent.
In the notebook PC segment, Chen forecasts demand to rebound this year with shipments increasing one percent, reaching 171 million units. "Time has shown that notebooks are irreplaceable," stated Chen. "They offer larger screens than tablets as well as a keyboard and mouse, which are all important for those who use their computers primarily for work reasons. Tablets remain limited to Internet browsing and entertainment functions."
TrendForce believes the global notebook PC market has the potential to grow between four to seven percent in the second half of 2014, reversing the decline in notebook demand. Key reasons cited: flagging tablet demand, demand for notebooks in the commercial market, and competitive pricing. The market researcher provides additional information about the tablet and notebook in two recent reports: WitsView Monthly Mobile PC ODM Shipment Tracker and WitsView Monthly Tablet Panel and Touch Module Price Book.