PC sales plummet, thanks to free Windows 10 and a dearth of must-have hardware

IDC projects a 2017 recovery led by business PCs, but consumer PCs could continue to suffer.

Antares explosion
Orbital Science Corp.'s Antares rocket explodes seconds after lift-off on October 28, 2014 Credit: Martyn Williams

Free Windows 10 upgrades are great for users but bad for PC makers, IDC said Monday. The research firm expect PC sales to struggle through next year, until the free Windows 10 licenses end—which should spur commercial customers to buy PCs once again in 2017.

Until then, however, the news is expected to be grim: IDC said worldwide PC shipments are expected to fall by 8.7 percent this year and 1.1 percent in 2016, leading to a mild recovery in 2017. The fate of consumer PCs is expected to be even worse: IDC said it can’t see a recovery even by 2019, the furthest extent of its forecast.

IDC refused to pin the blame on any one factor, though the firm said several have contributed to the decline. One major factor appears to be the lack of interest in buying PCs specifically to run Windows 10. Though features like Windows Hello and the upcoming “wire-free” future that Intel envisions for its Skylake PCs require new hardware, consumers aren’t making the investment—in part, most likely, because that hardware largely isn’t available.

What this means: If consumers aren’t going to spend more on PC hardware, this will likely mean several things: layoffs at PC companies, second-tier vendors either rethinking or pulling out of the market altogether, and cheaper PC prices overall. Don’t cheer just yet, though. It’s likely that PC makers will look at Microsoft, Amazon, and Netflix—all companies moving to a subscription model—and wonder how they can get a piece of that action. That may mean you'll see more services being pushed at you if you do buy a PC, with the hardware vendor demanding a cut on the back end. 

Slow sales of Windows 8 PCs didn't help

IDC had expected the second quarter of 2015 to be a transition period, as vendors prepared for Windows 10 systems in the second half of the year, the firm said. But a large inventory of Windows 8 notebooks already in the channel, plus issues surrounding the U.S. dollar, basically prompted PC vendors to sell Windows 8 notebooks at heavy discounts, encouraging users to upgrade themselves to Windows 10.

Worse still, the combined market for smartphones, tablets, and PCs is also slowing. IDC predicts only single-digit combined growth though 2019, with a decline in tablet sales expected for 2015.

Only the end of the free Windows 10 upgrades and the next hardware refresh cycle prompted IDC to hope for a recovery in 2017. And that’s in the commercial market—as for the consumer PC market, who knows.

Here’s IDC’s forecast; hover your mouse over the cart for the raw numbers. 

Jay Chou, an analyst for IDC, saw a light at the end of the tunnel—a dim one, but a light nevertheless. “Although the shortcomings of the PC business are obvious, a silver lining is that the industry has continued to refine the more mobile aspects of personal computers – contributing to higher growth in convertible and ultraslim notebooks,” he said. “The de-emphasis of touch on Windows 10 also paves the way for a more familiar experience and continuing unit growth on large-screen systems, particularly all-in-one PCs.”

 

This story, "PC sales plummet, thanks to free Windows 10 and a dearth of must-have hardware" was originally published by PCWorld.

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