+Shipments in the commercial market contracted by 1.4% in 2016 as growth in the two biggest economies in the region – China and Japan – offset the impact of one-off education projects in India and Thailand a year earlier.
+Thin and light notebooks with high resolution screens seem to be extremely popular among end users and are likely to drive demand for PC renewals in China and other parts of the Asia/Pacific region in the coming years.
Preliminary results from the IDC Asia Pacific Quarterly PC Tracker chart a 5.5% year-on-year (YoY) decrease for traditional PC shipments in Asia Pacific (including Japan), which totalled 101.8 million units in 2016 – a softer contraction from the 7.7% YoY drop in 2015. In Q416, the market declined by 2.9% YoY, reaching 26.2 million units, ahead of IDC's initial forecasts.
Shipments in the commercial market contracted by 1.4% in 2016 as growth in the two biggest economies in the region – China and Japan – offset the impact of one-off education projects which shipped in India and Thailand a year earlier. In Japan, this increase was a result of a boost in demand coming from businesses and government to secure a supply of PCs running Windows 7 before the deadline for the last Windows 7 shipments. Despite the eventual decision by Microsoft to extend this deadline, many companies and government bodies went ahead with the purchases.
In China, which also experienced a Windows 7 end-of-support buying rush, the enterprise sector benefitted from refreshes supported by increases in government spending and the start of the 13th Five Year Plan. Demand from small and medium sized enterprises (SMEs) remained soft.
The consumer market for traditional PC shipments also declined, dropping by 9.5% for the whole of 2016. Consumer desktops were particularly affected, with shipments dropping by as much as 17.7% in the fourth quarter. Notebook shipments stabilised in Q416, with consumer demand in China picking up in recent months and consumer notebook shipments in the country reaching 7% YoY growth in the final quarter of the year. New PC designs drove this recovery.
“Thin and light notebooks with high resolution screens seem to be extremely popular among end users and are likely to drive demand for PC renewals in China and other parts of the Asia Pacific region in the coming years,” said Maciek Gornicki, Research Manager for Client Devices Research at IDC Asia/Pacific.
The consumer PC market also seems to have benefitted from an uptake in demand for gaming PCs, which are expected to continue to grow in share in overall devices sales. Many vendors have increased focus and efforts to grow their gaming PCs portfolio in recent quarters, with several new gaming brands coming into the market and many interesting products announced at CES.
“The gaming PC sector is seen as very lucrative by PC vendors, with gamers likely to spend much more money and renew their machines more frequently. This segment remains however highly competitive and multinational vendors are likely to face heated competition from local brands, which offer end users more customisable high end solutions better suited to the needs of hardcore gamers,” Gornicki added.
Despite stabilisation in certain areas, traditional PC shipments continued to decline in the fourth quarter of 2016. The industry faced component supply shortages that impacted sell-in, while in many countries demand both from consumer and commercial end users remained soft due to currency fluctuations and uncertain economic environments. Business in India has been significantly affected by the demonetisation crisis, contributing to double digit declines in PC shipments.
Similar to worldwide PC trends, Asia Pacific is witnessing continued market consolidation in the PC industry. The top three players now hold 51.4% share in the market compared to 45% three years ago. Fierce competition and price erosion continue to favour vendors that are able to benefit from economies of scale and strong brand positioning in the channels. Lenovo remained the biggest player in the market in 2016 despite 6.9% decline in shipments. Dell came in second with 3% increase in volume, followed by HP whose shipments saw 2.3% growth.
2017 is expected to remain challenging. However, the market is likely to see stabilisation, especially in the commercial space. Although smaller economies are likely to remain impacted by weak currencies and adverse economic conditions, China and Japan are expected to see more corporate renewals in the coming year, while India is expected to see another wave of big rollouts in the education sector. In China the consumer market is also forecast to see some growth in notebook shipments. IDC currently expects consumer PC shipments to decline by 3% and commercial PC market to see a 1% growth in 2017 in Asia Pacific region.
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