Solution Providers Bullish On PC Sales Despite Cautious IDC Forecast

Solution providers remain optimistic about desktop sales, despite a report from market research firm IDC on Monday that forecast a PC market decline of 5.4 percent in 2016.

"We are still seeing steady demand," said Randy Copeland, president and CEO of Velocity Micro, a system builder and Intel partner based in Richmond, Va. "We are cautiously optimistic on the enthusiast space for this year. We now know that Windows 10's automatic upgrade to many older systems has put a damper on the upgrade cycle, but Skylake [processors have] been very popular compared to previous Intel updates, so business has been pretty solid."

IDC's report said overall worldwide PC shipments from 2016 to 2020 (including both portable PCs and desktop PCs) will decline 0.5 percent in mature markets.

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According to Loren Loverde, vice president of Worldwide Tracker Forecasting and PC research at Framingham, Mass.-based IDC, PCs will continue to struggle despite the combined release of Microsoft's Windows 10 OS upgrade and Intel's sixth-generation Skylake processors, because of competition from tablets and large-screened phones, as well as the ability for customers to upgrade older hardware to Windows 10.

"PCs remain an indispensable part of the tech landscape," said Loverde. "However, replacements continue to be postponed, and future shipments increasingly depend on replacing older PCs. Detachable tablets and phablets will remain formidable competitors to traditional PCs throughout the forecast."

Solution providers pointed to other factors, however, such as business applications, better computer hardware and the transition to Windows 10, as spurring upgrades among enterprise clients and keeping the PC market afloat.

"To those who say the PC is dead, I say, 'Not really at all,' " said Bob Nitrio, CEO of Ranvest Associates, an Orangevale, Calif.-based small-business Microsoft partner. "I think many are transitioning to different form factors that fit user needs more precisely. In the coming year, it's hard to say what's going to happen with upgrades. Some customers will hold back, others will move forward."

IDC's report did offer a glimmer of hope for OEMs: The research firm highlighted the fact that ultra-slim and convertible notebooks will face growth in the coming years -- ultra-slim notebooks are expected to grow more than 70 percent by 2020, while convertibles are expected to double by that year.

Michael Goldstein, president and CEO of LAN Infotech, a Fort Lauderdale, Fla.-based Microsoft partner, said desktop upgrades are tied closely to changes in business application requirements.

"I think that we'll see desktop upgrades continuing as applications change," he said. "Business requirements are always going up, and users will need the speed and performance forced into upgrades. There are also better and faster Intel processors out there, leading to faster hardware."