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Analysts: 2016 Marked Fifth Straight Year of PC Declines

Last year's holiday shopping season wasn't enough to stave off the worldwide PC market's years-long slump, according to recent data from research firms IDC and Gartner Inc.

This week, the two firms released their respective tallies of last year's PC shipments, and though they differ in their specific numbers -- Gartner considers 2-in-1 devices like the Microsoft Surface as part of the PC category, while IDC excluded them from its findings -- they both concluded that 2016 marked the fifth straight year of decline for the worldwide PC market, which has been on a downward trajectory since 2012.

IDC found total PC shipments for the year, at 260 million units, fell by 5.7 percent from 2015. Gartner's estimates were in the same ballpark: 270 million units shipped, equaling a 6.2 percent year-over-year decline. The last time PC shipments were that low was back in 2007, nearly a decade prior, according to Gartner.

The fourth quarter, historically a boom period for shipments of consumer electronics and devices, fared little better. PC shipments in Q4 2016 were roughly 70 million (according to IDC) or 73 million (Gartner). That's a year-over-year decline of 1.5 percent (IDC) or 3.7 percent (Gartner).

"Stagnation in the PC market continued into the fourth quarter of 2016 as holiday sales were generally weak due to the fundamental change in PC buying behavior," said Gartner principal analyst Mikako Kitagawa in a prepared statement. The current crop of consumers tends to buy PCs when they're needed, not necessarily as gifts, Kitagawa argued. Instead, newer technologies like smart watches, VR headsets and AI speakers like Amazon.com's Alexa were the big draws of the holiday shopping season.

Additionally, while new PC form factors like ultra-slim notebooks and 2-in-1 devices, as well as improvements to processing power and battery life may have been effective in turning some consumers into "engaged PC users who put high priority on PCs," such advances haven't been enough to sway consumers who rely heavily on smartphones for their computing needs.

"There is the other side of the PC market, where PCs are infrequently used. Consumers in this segment have high dependency on smartphones, so they stretch PC life cycles longer. This side of the market is much bigger than the PC enthusiast segment; thus, steep declines in the infrequent PC user market offset the fast growth of the PC enthusiast market," Kitagawa said.

There is room for "some recovery" in the PC market, however, according to IDC Vice President Loren Loverde.

"The contraction in traditional PC shipments experienced over the past five years finally appears to be giving way as users move to update systems. We have a good opportunity for traditional PC growth in commercial markets, while the consumer segment should also improve as it feels less pressure from slowing phone and tablet markets."

About the Author

Gladys Rama is the senior site producer for Redmondmag.com, RCPmag.com and MCPmag.com.