IDC: Commercial PC Shipments Healthy In 2014, But Growth Set To Flatten

The U.S. commercial PC market is expected to show healthy growth in 2014, with sales of laptops and desktops set to peak in the third quarter, market research firm IDC said in a report published Tuesday.

U.S. commercial PC sales are forecast to grow 11 percent overall in 2014, IDC said. Hewlett-Packard is expected to lead US commercial shipments with a 27.3 percent share of the market, followed closely by Dell with 27.1 percent, Lenovo with 12.4 percent and Apple with 10.4 percent, according to IDC's figures.

Worldwide PC shipments are expected to fall by 2.7 percent in 2014. And growth in the U.S. commercial PC market is expected to begin flattening next year, growing at a rate of around 1 percent through 2018, according to IDC.

In the report, IDC classifies PCs as desktop, laptops, and two-and-one devices, but doesn't include tablets with detachable keyboards.

Strength in the commercial PC market is being driven by booming Chromebook sales, end-of-life Windows XP upgrades, and an improved economy that has loosened the purse strings of IT budgets, IDC said.

Yet IDC analyst Loren Loverde said growth in the commercial PC market is set to flatten in the coming years.

"Windows 10 will not be enough to reinvigorate PC sales, and unlike previous upgrade cycles, there aren't applications or a single technology sparking upgrades within the enterprise," Loverde said in an interview.

Loverde said PC sales have seen a significant boost from smartphone and tablet users who've decided to upgrade their PCs.

"Going forward, as younger generations become more mobile and Web oriented, and emerging regions in particular prioritize converged devices, the PC market will continue to face tough competition and be more focused on replacements, with limited potential for growth," he said.

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Loverde said there is volatility in the PC market stemming from Hewlett-Packard's recent move to separate its PC division from its enterprise business, and Dell going private last year.

"HP's PC business might be stronger in the long run, but in the short term, instability is going to create opportunities for Dell and Lenovo to make gains," Loverde said.

Many solution providers have told CRN that 2014 has been a great year for their PC sales efforts.

"Our PC business is very strong, growing 15 percent over the past year," said Douglas Grosfield, CEO of Xylotek Solutions, an Ontario-based solution provider and a Dell and Lenovo partner, in an interview.

Some margin-conscious solution providers are looking for new ways to keep PCs profitable. With shrinking PC margins, distributors and OEMs have been stressing service contracts, new customer bonuses, SPIFs and back-end rebates to help solution providers recoup some of that margin.

"PCs used to cost $2,000. Now a comparable system runs $600," Grosfield said.