Gloomy PC data doesn't tell full story, say critics

Gartner says market continued to stagnate in Q4, but onlookers claim local PC builders are thriving as market shifts towards high-end machines

IDC and Gartner have issued yet more gloomy PC data, but some have argued that the latest numbers don't reflect an uptick in the fortunes of local PC builders.

According to Gartner, global PC shipments slipped 3.7 per cent in the final quarter of 2016 as "stagnation" in the market continued.

IDC put the Q4 decline at a more modest 1.5 per cent.

However, some local channel onlookers believe the negative headlines generated by IDC and Gartner's data in recent quarters fail to capture the dynamics of the local system builder market.

Rich Marsden, managing director at VIP, said he expected 2017 to be the "biggest opportunity" VIP and its PC brand Zoostorm has had as consumer and business buyers gravitate towards higher-end machines.

"If you're building entry-level machines and home PCs and are competing against Lenovo, Dell and HP, then that [IDC and Gartner] data is really valuable, but if you're not in that market and you're building high-end workstations or high-end consumer machines, it's completely irrelevant," he said.

"I don't see any doom and gloom at the moment."

Marsden pinpointed Utopia, whose average selling price (ASP) rose to £2,500 last year, as well as DinoPC, Scan, Overclockers and Chillblast as among the local PC builders he said are thriving, adding that VIP's own ASP has trebled.

"You don't need a £179 or £299 PC any more in my opinion because if people want an entry-level PC they can buy a laptop or tablet which is mobile and has a much better user experience," he said.

"My entry-level desktop business is declining, but my ASP has tripled. For every PC I sell I've got three fewer entry-level PCs to build and the money is in the higher-end products, so that's great news for system builders. Yet that never seems to be reported."

According to Gartner, the high end of the PC market, encompassing form factors such as two-in-ones and thin and light notebooks, grew quickly in Q4, but this was more than offset by steep declines in the broader market.

Lenovo, HP Inc and Dell tightened their grip on the overall market in Q4, Gartner's data suggests, with this trio now commanding a collective 57 per cent market share, compared with 53 per cent a year earlier.

Although Gartner characterised the market as "continuing to stagnate", IDC mustered more optimism, saying its Q4 data reinforced its expectations for market stabilisation, and even some recovery.

"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," said Loren Loverde, vice president, Personal Computing Trackers & Forecasting.

Gartner and IDC put the decline in global PC shipments for 2016 as a whole at 6.2 and 5.7 per cent, respectively.