PC Sales to Decline in 2019 Amid CPU Shortages, Weak GPU Market

For a brief period in 2018, it looked like the PC market might finally, finally be poised for recovery. After seven straight years of declines, shipments had begun to edge up. The first quarters of 2018 showed signs of growth, with a 2.7 percent improvement in Q2 2018 over the previous year. That was the strongest growth rate in the market since Q1 2012, just to put things in perspective. Ultimately, and unfortunately, Intel’s CPU shortage may have prevented any improvement. Total sales fell 1.2 percent from 2017-2018. And according to IDC, that pattern will repeat through 2023.

The firm has shared its long-term PC market forecast for the combined PC and tablet market. It predicts a long-term CAGR of -1.2 percent for 2019 – 2023, with the market for both types of device falling from 391.1 million units in 2019 to 372.6 million units in 2023.

The combined market is expected to shrink 3.3 percent in 2019, but as the chart above shows, much (though not all) of the decline is coming from slower sales of slate devices. It’s not that the mainstream PC market isn’t shrinking on the whole — it is — but there’s also growth in some spaces that is partially offsetting it. Detachable sales (we typically refer to these as 2-in-1’s) are expected to increase at a 4.6 percent annual growth rate. IDC doesn’t predict an exact growth rate for Chrome-based detachable tablets but believes they’ll find a market as well.

Declines in the early part of 2019 may still be patched up in the back half of the year, as Windows 7 nears end-of-life. The firm notes that it expects increased commercial shipments in that time frame as companies move to replace aging hardware.

At the same time, however, it’s clear that analysts at these firms are hunting for the features that are supposed to justify upgrades in the first place. “While the long-run PCD market remains in persistent decline, the constitution of the market continues to churn for the better,” said Linn Huang, research director for Devices and Displays at IDC. “And with ray-tracing ramping up and 5G-connected, dual-screen, and foldable devices on the not-too-distant horizon, consumers and professionals will likely find something compelling at the premium end.”

The long-term impact of ray tracing is a complete unknown. Dual-screen devices (motto: Why one fragile piece of glass when you can have two?) are an unknown. It’s not clear that a foldable tablet has any real utility in the first place (if it starts off as a tablet, exactly what form factor does it fold into, a coffee table?). 5G-connected devices are definitely coming, but it’s simply not clear that these are more than a manufacturer fever dream. It’s a given that AT&T, Verizon, and their ilk would love nothing more than to sell you a 5G device with absurd per-GB data pricing. Whether these devices will actually catch with more than a tiny fraction of consumers remains to be seen as well.

The real problem is, the PC market is mature. People aren’t buying machines for specific new features, at least not en masse. 5G and new display technology may move the needle for some people, but given the prices such technology would command in the near future, it’s unlikely we’ll see any significant jump in sales for these reasons alone. “Something compelling at the premium end” is damnably faint praise for an industry that once enjoyed record-breaking growth streaks. Looks like it’s all we’ve got.

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