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The latest figures from Context on the European PC market suggest there may be a significant divergence between the commercial and consumer space. While the commercial segment experienced a 15% sales increase in July, consumer sales dropped by 2%.
That doesn’t seem like a lot but, according to Context, weak demand in the consumer space is a pattern that has “characterised the past few quarters”. The PC market has managed to stay reasonably buoyant because of healthy demand from commercial buyers.
Senior analyst Marie-Christine Pygott believes that commercial demand “will remain strong throughout the second half of 2019 as migration to Windows 10 continues”, but it is expected to “remain soft” for consumer PCs.
And it is not just confined to sales through distribution, she says. “The current weakness in the consumer segment is something we see across the whole market, not just distribution,” says Pygott, naming the main reasons as “a perceived lack of innovation in the segment, coupled with the increased usage of smartphones for day-to-day tasks”.
This has led to a lengthening of the lifecycle for home PCs. “Users just wait longer before buying a new machine,” she adds. The economic and political situation is not helping some countries, including the UK, where “Brexit uncertainty has lowered consumer confidence and spending”, says Pygott.
And although there has been growth in consumer sales of ultra-slim notebooks and Chromebooks, it is too small to reverse the overall decline. Will those categories become large enough over time to mitigate the slowdown in traditional PC and notebook sales?
It’s an interesting question. You have to think that, barring dramatic redesigns in the PC and notebook segments, the answer is probably no.
But even if ultra-slim notebooks and Chromebooks do see very strong growth, will that boost sales by speeding up the replacement cycle compared to home PCs and laptops? It doesn’t seem likely.
On the commercial side, the strong role played by Windows 10 migration is helping to drive demand, but it does raise the question of what will happen when the refresh cycle starts to slow down.
And while the issue of innovation as a driver for sales is nowhere near as pronounced as in the consumer space, it is reasonable to wonder whether PCs and notebooks might not be as prominent in the commercial segment in the future.
It is also not beyond the bounds of possibility to expect commercial users who – don’t forget – are also consumers, to seek to increase their use of smartphones for day-to-day business tasks.
Nevertheless, from a channel perspective, commercial growth is far more welcome for far more partners than a rise in consumer sales would be. So, as trends go, this is much better than if the positions of commercial and consumer were reversed.