Canalys warns 2020 unlikely to match last year in the PC market

The analyst house has cast its eye over the state of the PC market and given the reasons why the months ahead might prove to be slightly more challenging than 2019

Earlier this week IDC and Gartner revealed that the PC market had closed out last year with growth for the first time in nine years thanks to the strength of commercial demand.

Canalys has added some details to the picture with the analyst house also agreeing that the market grew year-on-year by 2.7% in 2019 but has warned that the performance of the last 12 months is unlikely to be repeated this year.

Some of the reasons for that are well known, with the Windows 10 migration losing steam as a diminishing number of users are left to make a shift away from Windows 7. But there could also be some major changes in the vendor landscape that have the potential to disrupt the momentum build up over the last 18 months.

“2020 is unlikely to repeat the success of 2019. Macroeconomic factors continue to influence the PC industry heavily, as key markets like the US, Japan and India are expected to under-perform, for the major part of the year. Adding uncertainty to the market is a possible disruption to HP, which continues to be the target of a hostile takeover by Xerox,” said Rushabh Doshi, Canalys’ research director.

The latest episode in the HP and Xerox saga saw the printer player revealing it now has $24bn funding to fund an acquisition. That came just a few weeks after the target of its takeover ambitions claimed that the firm would fail to get hold of the funds. Following the disclosure HP stated that the offer undervalued the firm and things went back to square one.

HP holds second place in the PC market, with Canalys finding that the vendor shipped 63m units last year, not too far behind the 64.9m that Lenovo saw out of the door. Dell outpaced the market with 5.3% growth but is behind its rivals in third place. Combined the trio of household names now account for two-thirds of all shipments.

Brexit loomed large over the performance of the European market with shipments increasing by 2% across EMEA in the fourth quarter. But with the Prime Minister Boris Johnson pledging to leave at the end of this month there is at least some certainty around the process, which is encouraging some customers to unlock some investment plans.

Canalys is also expecting the channel to build up PC inventories to make sure that there is enough product in distribution to meet customer orders.

Those resellers that have been pushing the end of support of Windows 7 as a reason to upgrade could adapt their sales pitches to concentrate on the need for fresh hardware to support 5G as well as trying to appeal to those that would like to own some of the foldable screen devices that are emerging.

“5G and foldable displays will bring some excitement to otherwise iterative upgrades. However, vendors remain in an experimental phase for both these features. Foldables suffer from a serious lack of use-cases, and demand is unlikely to grow unless second or third-generation devices can prove durability. 5G on the other hand, needs ecosystem readiness from network operators and cloud providers to justify the value offering of these devices. Mainstream adoption of 5G and foldable displays is still a good two to three years away," said Doshi.

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