Hardware Renewals in the Commercial Space Will Drive the PCD Market in 2018

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Shipments of Western European personal computing devices (PCDs), including traditional PCs (a combination of desktops, notebooks, and workstations) and tablets (slates and detachables), will total 76.3 million in 2018, a 3.3% YoY decline (-3.0% in 2019 with 74.0 million shipments).

Convertibles and ultraslims will be the primary drivers of growth, while detachable growth has been revised slightly downwards for forecast years through to 2020, following a slowdown in adoption of Windows-based devices. That said, these three form factors will represent a sizeable 43.7% of the total PCD market by the end 2022, in contrast to 25.9% at the end of 2017. Traditional form factors will continue to fall by the wayside when competing in a market that is placing increasing value in flexibility and mobility. The newer, thin and light, form factors provide users the versatility to adapt the device to any of their mobile needs, through ease of portability as well as anywhere use. Additionally, the allure of these form factors is driven by their elegant designs and attractive price points, further facilitating the decision to choose them. Nevertheless, there will still be a strong opportunity for traditional products within the gaming market, which is emerging from the niche category and becoming more mainstream.

From a segment perspective, the commercial PCD segment will perform well, growing at 0.8% by the end of 2018, driven by continued momentum from the corporate sector during the first half of the year, and then a ramp up of refreshes from medium business toward the end of the year. Upcoming deals and renewal fulfilment from previous quarters, as well as increasing user demand, will lead to a strong performance from AIOs and smaller form factors, softening the desktop decline. Continued acceleration toward mobility and a strong pipeline of deals in the corporate space will make notebooks the major contributors to the positive commercial outlook. Ultraslims and convertibles will remain the preferred form factors, driving the overall growth. Underlying these factors, increased security concerns and strengthening of Western European economies will act as additional growth drivers.

"Recent data breaches have emphasized the importance of up-to-date and secure hardware, along with software to fully address a company's security needs," said Liam Hall, research analyst, IDC Western Europe Personal Computing. "These concerns, combined with the upcoming requirement to comply to the new standard as set out by GDPR, will act as a catalyst for hardware refreshes, where companies will likely opt to upgrade to the newer, more versatile form factors."

On the other side, the consumer segment is still expected to decline through to 2022, albeit at a slower rate. The outlook for 2018 is a relatively weak -6.2% YoY, following a weaker holiday season leading to higher inventory in the region, which is expected to have an adverse impact on the shipments in the coming quarters. Despite strengthening of the consumer demands in certain subregions such as southern Europe, saturated markets and longer life cycle of the installed base in some of the bigger economies are expected to weigh heavily on the growth prospects. However, ultramobile form factors, gaming notebooks, and convertibles at premium price points are likely to gain further traction in this shrinking market as consumers are starting to realize the value of high-end configuration for seamless experience.

Detachables are expected to continue to grow in both the commercial and consumer spaces, growing by 19.6% and 9.1% respectively, by the end of 2018. On the commercial side, SMBs will retain the majority of share, but large and very large enterprises will grow at a faster pace. On the consumer side, detachables will face a more challenging scenario, caused predominantly by the slowdown in adoption of Windows-based devices. While demand is still strong for detachables, a sizeable proportion of this is expected to be cannibalized by convertibles.

The outlook for slates will remain gloomy, and they will continue to decrease through to 2022. Education will be the key adopter within the commercial space, supported by the affordability factor, while the importance of flexible solutions will drive some adoption in enterprises. However, the life cycle of the installed base will continue to increase as lack of innovation causes the value proposition for slates to diminish for consumers, meaning product renewals will be less frequent.

IDC's Quarterly PCD Tracker provides unmatched market coverage and forecasts for the entire device space, covering PCs and tablets, in more than 80 countries — providing fast, essential, and comprehensive market information across the entire personal computing device market.