Prepare for corporate PC price hike as manufacturers protect margins

Gartner reports that the device market grew 2.8% in 2014 in units sold as revenues shrank 1%, predicting price hikes to protect margins

The device market grew 2.8% in 2014 in terms of unit growth, but revenues shrank 1% to $635bn, according to analyst Gartner.

The analyst's Forecast: PCs, Ultramobiles and Mobile Phones, Worldwide, 2012-2019, 1Q15 Update predicted that the mobile phone market is expected to total 1.9 billion units and grow 3.5% in 2015.

Looking at the PC market, Ranjit Atwal, research director at Gartner, said manufacturers were affected by dollar depreciation against local currency.

Atwal predicted that PC manufacturers would increase the prices of their professional PCs to counter the weak dollar and protect their margins.

He said: "The currency squeeze is forcing PC vendors to increase their prices in order to remain profitable and, as result, it is suppressing purchases. We expect businesses will delay purchases of new PCs, and consumers will delay or 'de-feature' their purchases."

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Given that most organisation have a fixed budget, the price increases will make an impact on the number of units IT departments purchase. "Corporates will adjust what they can purchase," he said.

Atwal expected 2015 would be a weaker year for PC upgrades on business as organisations get ready for Windows 10. He said: "Anyone buying a PC now will downgrade to Windows 7. But in 2016/17 we expect to see greater uptake of Windows 10."

But in the consumer market, Roberta Cozza, research director at Gartner, said: "Consumers will continue to prioritise spending on phones over PCs and tablets in 2015."

The presence of cheaper smartphones will continue to appeal to consumers, and counter the need to increase prices. Mobile phone pricing has been increasing over the last few years – driven by a rising premium-phone average selling price – but will now remain flat or slightly down as the smartphone market reaches saturation over the next few years.

Worldwide ultramobile shipments, which include tablets and clamshells, are on pace to total 237 million units in 2015, a 4.3% increase over 2014 (see table below).

Device Type

2014

2015

2016

2017

Traditional PCs (Desk-Based and Notebook)

277,118

252,881

243,628

236,341

Ultramobile (Premium)

36,699

53,452

74,134

90,945

PC Market

313,817

306,333

317,762

327,285

Ultramobiles (Tablets and Clamshells)

227,080

236,778

257,985

276,026

Computing Devices Market

540,897

543,111

575,747

603,311

Mobile Phones

1,878,968

1,943,952

2,017,861

2,055,954

Total Devices Market

2,419,864

2,487,062

2,593,608

2,659,265

"Following rapid growth, the current mature consumer installed base for tablets is comparable to that of notebooks," said Cozza. 

"Not only is the tablet segment nearing saturation in mature markets, but the influx of hybrids and phablets will compete directly with tablets in emerging markets."

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