IDC Expects PC Shipments to Fall by -6% in 2014 and Decline Through 2018
Worldwide PC shipments fell by -9.8% in 2013, slightly better than a projected decline of -10.1%, but still the most severe contraction on record, according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker.
Context & Ripple Effects
IDC is confirming what its rival tracker had already signaled: in January, Gartner counted Q4 shipments down 6.9% to 82.6m units and called 2013 the worst yearly decline in PC history, and IDC's Worldwide Quarterly PC Tracker now puts the full-2013 figure at -9.8% — a hair better than its own projected -10.1%, yet still the steepest contraction on record.
The forecast matters because it turns a one-year shock into a five-year arc: IDC expects another -6% in 2014 and declines persisting through 2018. Its own earlier data shows where the units went — the firm raised its tablet forecast to 172.4 million units for 2013 back in December 2012, and has been reporting strong growth in the broader smart-connected-device market while flagging PC growth slowdown since August 2012.
First-order effects
- Every major PC vendor enters 2014 planning against IDC's assumption that volumes keep shrinking through 2018, making share gains the only route to growth and intensifying price competition among HP, Lenovo, Dell and the rest of the top five.
- Microsoft and Intel, whose Windows-and-x86 franchise is tied to those shrinking unit counts, now have a published five-year baseline of decline to plan licensing and silicon roadmaps around rather than a cyclical dip they can wait out.
Second-order effects
- Component suppliers — panel, DRAM and ODM capacity built for a larger PC base — face persistent oversupply pressure, pushing consolidation among contract manufacturers as volumes fall for a fifth straight year under this forecast.
- The divergence between Gartner's Q4 reading (-6.9%) and IDC's (-9.8% for the year, with quarterly detail to come) forces enterprise buyers and investors to triangulate two competing trackers, raising the stakes on which firm's numbers become the benchmark for the decline.
Third-order effects
- If IDC's through-2018 trajectory holds, the PC settles into a mature-replacement market defined by refresh cycles rather than unit growth, with industry profits concentrating around fewer vendors and the Wintel duopoly's pricing power eroding alongside volume.
- A five-year published decline forecast from both trackers effectively institutionalizes the tablet-first narrative IDC itself helped build with its 2012 device forecasts — capital allocation across the supply chain will treat portable smart devices as the default personal computing purchase.
The trend: Personal computing demand is completing its shift from the PC to tablets and smartphones, converting the PC into a declining replacement market whose size both Gartner and IDC are now forecasting downward through 2018.