WHAT THE FUTURE HOLDS
The market dynamics in the PC & Notebook subsector are breathtaking. Looking at products such as Ultrabooks, Tablets, Notebooks and desk-based PCs, the changes are profound. Counting USD 203bn revenues and 286M units sold in 2015, the PC & Notebook subsector declined by 16.6% in revenues and 9.9% in shipments compared to 2014. In the next three years, the latest forecasts see slight growth in shipments (+25M units or 1.6% annual growth) and continued decline in revenues (down by USD 10 bn or -1.7%). In this increasingly price-driven market, cost-effective supply chain solutions will become more and more important.
In this commoditized market, end-consumers have high bargaining power and changes in their demand will underpin new market developments. A key consumer-driven trend will be the demand shift from PCs towards Ultramobiles. In particular, although Premium Ultramobiles and Notebooks share similar capabilities, the higher portability of Ultramobiles together with the contribution of innovative hybrid and detachable form factors will be determining elements in consumer choice within the next three years.
Alongside the forecasted revenue expansion of the Premium Ultramobiles market (USD +22bn by 2018), revenues for Notebooks will further decline by USD 18bn. Revenues for more basic Ultramobiles such as tablets will drop USD 5bn, because of increasing competition from larger-screen mobile devices such as Phablets. Desk-based computers will see another USD 8bn revenue loss in 2018 – altogether a decline of USD 10bn for the combined market segment. Growth in the Notebook and desk-based PC segment will be limited to niches such as high-performing gaming PCs.
The overall positive development in unit sales is driven by the additional 51M Ultramobiles expected to be sold in 2018. This trend is also confirmed when looking at the lifespan of these devices: in 2018, 40% of the PC installed base will be older than three years while the entire Ultramobile installed base is expected to be all new.
Overall, this subsector is stabilizing but with some major shifts and challenges for corporate success. Supply chains will play an important role in realizing fast time-to-market in some exiting pockets of growth, in keeping costs under control for mature products, and in reacting quickly to consumer-driven changes in demand.