MacBook Airs and Microsoft Surface haven't stopped the PC slide

The device market is set to decline for the second year running as PC struggles to redefine itself.
Written by Steve Ranger, Global News Director

Elegant new designs like the Microsoft Surface are proving popular, but they can't make up for the overall decline in PC sales.

Image: Microsoft

The grim news for hardware makers continues, with analysts predicting that shipments for personal computing devices -- PCs, tablets, ultramobiles and mobile phones -- will decline three percent this year

If it comes to pass, that will be the second consecutive year of decline: last year total shipments dropped 0.75 percent, according to analysts at Gartner, who expect the total device market to remain flat for the next five years.

Only what the analysts term the 'premium ultramobile' category, which is made up of devices like the MacBook Air and Microsoft Surface, is expected to see growth this year (along with, at the other end of the spectrum, entry-level mobile phones). But the five million extra premium devices won't make up for the 28 million drop in traditional PC sales that are predicted for this year. And even though there could by 77 million of these sold in 2018, the decline in traditional PCs will mean that the total PC market in 2018 will still be smaller than it was last year.

Gartner also expects sales of 'basic and utility' ultramobiles -- which it defines as devices such as iPad, iPad mini, Samsung Galaxy Tab S2, Amazon Fire HD, Lenovo Yoga Tab 3, Acer Iconia One -- to decline at least until 2018.

Gartner said the PC market could drop eight percent this year. In Europe it predicted that PC sales will bottom out in 2016, although the market remains difficult following the Brexit vote which means that vendors may strip out features to keep prices lower.

For the PC market to even manage to stay flat in 2017, business spending needs to flourish, Garter said: by then, the stockpiles of Windows 8 PCs should have been cleared, while large businesses in mature markets would be looking to move to Windows 10.

Ranjit Atwal, research director at Gartner, said that more affordable hardware and increasingly available virtual reality content may also encourage consumer PC buyers.

Image: Gartner

Meanwhile, smartphone growth continues to slow as the phones that are "increasingly capable and remain good enough for longer," said Roberta Cozza, research director at Gartner. The analyst predicted that the Android market will be boosted by Chinese vendors offering more affordable premium devices, while -- despite the availability of the iPhone 7 -- the analysts predicted that Apple shipments will weaken after a very strong 2015. As a result, Gartner expects total smartphone market to only increase 4.5 percent with premium smartphones declining 1.1 percent in 2016.

But the future is brighter for smartphones than for PCs, with Cozza predicting the market for premium smartphones to return to 3.5 per cent growth in 2017, as stronger replacement cycles kick in and in anticipation of a new iPhone next year, which is expected to offer a new design and new features that are attractive enough to convince more replacement buyers.

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