IDC: PC Market Has Yet To See Windows 10 Windfall

System builders have long hoped that Microsoft's Windows 10 operating system, released in July, and Intel's new performance-enhanced Skylake processors, launched in September, would be a joint lifesaver for the flailing PC market.

But OEM partners have to wait longer before they will begin to see any turnaround for the struggling PC market, according to a report released by marker research firm IDC on Friday.

According to IDC, PC shipments dipped 10.8 percent year over year in the third quarter, as the market faces a transition period in the midst of a major operating system upgrade clouded by challenging financial conditions.

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Jay Chou, research manager for IDC's Worldwide PC Tracker, told CRN that Windows 10 as a free download reduced consumers' short-term initiatives to buy a new PC. Beyond that, currency exchange issues impacting the digestion of PCs and sizable old Windows 8 PC stock in certain areas also impacted the overall market, he said.

"We should see more PCs incorporating Skylake and Windows 10 in Q4, and they should help, but are not expected to reverse trends," said Chou. "Despite the tablet market slowing down, we don’t see PCs really stabilizing yet. We expect PC volume to shrink further in 2015 and 2016, then stabilize beginning in 2017."

In the third quarter, the impact of the OS release was lessened in part by currency devaluation, but also by the short time frame between Windows RTM and the official retail release, which led OEMs to roll out only a limited selection of Window 10 PCs for launch.

Those factors impacted the most successful vendors across the board in the third quarter, including the top worldwide PC vendor, Lenovo, whose shipments declined 4.9 percent in the third quarter. Lenovo in July debuted an array of devices loaded with Windows 10, including Yoga 3 Pro and Yoga 500.

Behind Lenovo, vendors like Hewlett-Packard, Dell and Apple also declined in their year-over-year shipments.

Slow Windows 10 adoption rates are prevalent among enterprise customers. In the commercial segment, IT budgets remain focused on projects other than Windows 10, including mobile readiness and digital transformation initiatives, according to IDC.

"Windows 10 has not really done much to jump-start the market this quarter," acknowledged Kent Tibbils, vice president of marketing at ASI Corp., a Fremont, Calif.-based system builder. "It's not a reflection of Windows 10, it's just where the market is at. Many businesses aren't ready right now to move to a new operating system, though we're hearing that customers are evaluating what to do in terms of Windows 10."

Meanwhile, said Tibbils, Intel's sixth-generation 14nm Skylake processor has boosted only niche markets. This applies in particular to the Santa Clara, Calif.-based company's S-Series Skylake architecture, which includes eight SKUs targeted at high-end desktop performance and value, such as gaming and traditional towers, all-in-ones and mini PCs.

Earlier in August, Intel launched two of these processors, the Intel Core i7-6700K and Core i5-6600K, aimed at the enthusiast segment.

"Skylake's only been released on devices in the higher end. … It's still a niche launch, where it's impacting gaming environments only at the high ends," said Tibbils.