IDC reported Tuesday PC shipments are forecast to dip 6 percent in 2014, but channel partners are bullish on desktop and laptop sales to business.
"We are up over last year when it comes to PC sales, and we anticipate strong growth well into 2014 thanks to end-of-life issues around XP," said Joe Lore, sales director at Sunnytech, a Lenovo partner based in Woburn, Mass. "Our custom PC build business is up 15 to 18 percent, and we are seeing increased interest in Lenovo."
According to IDC, worldwide PC shipments nose-dived 9.8 percent in 2013 and are projected to keep heading south, dropping 6 percent in 2014. IDC said things could have been worse, if it weren't for short-term factors such as a rise in PC demand due to a temporary spike in PC sales tied to Windows XP replacement systems. IDC forecasts worldwide PC shipments will total 296 million in 2014, reaching 292 million in 2018.
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Rajani Singh, IDC senior research analyst, said the economics of a saturated PC market are taking their toll on the worldwide IT industry. "Everybody that needs a PC already has one. And PC life cycles are getting longer, meaning fewer sales."
As the PC market continues to slump, with prices and margins plummeting, some computer manufacturers have been raising a white flag. Last month, Sony announced plans to sell its struggling Vaio PC business to Japan Industrial Partners. The Korea Times reported that LG Electronics was considering scaling down, or withdrawing completely, from the PC business.
But for leading North American PC makers that have strong ties to large enterprise, IDC's Singh said, demand for business desktops and laptops will remain moderate to strong -- creating opportunities for OEM partners such as Lenovo, Hewlett-Packard and Dell.
"Unlike the larger worldwide market, here in the U.S. there will be moderate 1 percent growth for PCs within mid- to large enterprise," Singh said. Lenovo, with a strong, direct and channel strategy, stands to reap the biggest rewards, but so do Dell and HP. "It's true the margins are thin, but the volume of PCs sold creates a very lucrative market."
Sunnytech's Lore said he anticipates PC sales to continue as companies migrate off of Windows XP, right up to the operating system's end-of-life deadline this April. Further sales will be buoyed by life-cycle system refreshes, VARs such as Lore said.
"We hope to hear more about Windows 9 by the end of 2014. We continue to feel optimistic Microsoft will have a strong, new OS our customer will want to migrate to in 2015, extending PC sales for the foreseeable future," Lore said.
For some OEMs and VARs, that optimism is hard to come by.
Asus declared it would concentrate on smartphones in 2014, with plans to grow its phone sales from 1 million units in 2013 to 5 million units this year. While Asus' PC sales only fell 3 percent year-over-year, the company said smartphones will be a priority over desktops and notebooks.
"A few years back, I saw the writing on the wall and got out of selling PCs. It's a hard business with little margins. Today I'm spending my time helping companies mobilize their workforce, deploy tablets, and build out their back-end infrastructure," said Mario Cipriano, president of Cleveland-based T&M Technology Solutions.
PUBLISHED MARCH 4, 2014