Ramp-Up in the Midmarket will Support Commercial Growth Through 2H 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 76.2 million in 2018, a 3.4% YoY decline (-3.7% in 2019 with 73.4 million shipments). The undergoing renewal cycle will continue to pick up steam, with the midmarket being the front-runner in 2018H2.

Renewals in the commercial space are occurring at a faster pace than anticipated, showing promising signs of resilience despite the component shortage. The market will remain healthy, driven primarily by the midmarket, where business will really begin to pick up, and supported by deals in corporate. The improved economic outlook in some major countries — which is accelerating public and private IT spending — will also contribute toward the positive second half of 2018. Replacement of traditional DT for small and ultra-small form factors is on the rise in larger companies and installed base renewal will generate the first positive year for desktops in the commercial segment since 2014. On the notebook side, ultra-mobile and hybrid solutions will continue along their solid growth trajectory in the commercial space as enterprise mobility adoption will continue to drive demand for ultra-portable and versatile devices. Security remains an increasing concern, and OEMs will keep focusing on addressing the potential threats in terms of hardware and features.

"Windows 10 adoption and commercial renewals, particularly in the midmarket, are expected to drive the market in the second half of 2018," said Liam Hall, research analyst, IDC Western Europe Personal Computing. "The immediate outlook for consumer is more challenging, however, as relatively high inventory is expected to further dampen the sell-in, while the component shortage is likely to act as an additional hindering factor to the overall performance."

As the concept of a stationary PC device becomes increasingly obsolete in the consumer space, desktops will continue to be gradually replaced and will therefore perform below the market average. Nevertheless, gaming will continue to offer a pocket of growth within this product category for gamers who want the maximum performance output. For notebooks, sell-in was high in 2018Q2, driven by fulfillment of earlier orders and preparation for the remaining back-to-school season in 2018Q3. That said, the component shortage will likely result in a slight backlog that is expected to delay shipments into upcoming quarters. Convertibles and ultra-slims will continue to expand as consumers increasingly seek devices that provide an improved user experience.

For detachables, the pace of adoption will remain more constrained than initially projected as prosumers and middle and top executives continue to be the main adopters, while entry-level devices do not attract new end users for notebook replacement. The outlook for slates has been slightly improved, in part due to adjusted price points, but a lack of compelling reasons for slate renewals means overall growth is not expected to be seen moving forward.

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.