PC sales experience sharp decline as smartphone unit sales reach 1.4 billion
Two separate reports from market research firm Gartner show a stark contrast between PC and smartphone sales over the past six months.
The company’s latest global smartphone sales report published last February revealed that the total global sales of smartphones hit the 403 million units mark in the last quarter of the previous year, up by 9.7 percent from the same period in 2014. Nonetheless, despite the 14.4 percent improvement from the total sales recorded in 2014, the 1.4 billion total unit profit for 2015 has been the slowest growth rate for the market since 2008.
According to Anshul Gupta, Gartner’s research director, continuously helping the growth is the emergence of smaller players catering to low-income consumers, as well as the rising demand for premium models from established manufacturers such as Samsung, Apple, Huawei, and Lenovo.
“An aggressive pricing from local and Chinese brands in the midrange and entry-level segments of emerging markets led to consumers upgrading more quickly to affordable smartphones,” Gupta explained.
Along with this growth is a sharp decline in PC shipments, which only recorded a total of 64.8 million units from January to March 2016, down by 9.6 from the same period of the previous year. PC sales, according to the latest data published by Gartner, has been exhibiting a sharp reduction in total shipment number since smartphones become ubiquitous—and a consumer necessity—on the market. The latest decline rendered the market its sixth consecutive shipment decline since 2007 when number plummeted below 65 million units mark.
In a statement by Mikako Kitagawa, Gartner’s principal analyst, total unit sales decline has remained global. The dropping number is experienced across Latin America, North America, and Asia Pacific.
“All major regions showed year-over-year shipment declines, with Latin America showing the steepest drop, where PC shipments declined 32.4 percent. The ongoing decline in U.S. PC shipments showed that the installed base is still shrinking, a factor that played across developed economies,” said Kitagawa.
Decline in PC demand is not really surprising as more customers realize the efficiency of smartphones and tablets capable of either emulating or surpassing PC in terms of performance, storage capacity, and features. “PCs are not being adopted in new households as they were in the past, especially in emerging markets. In these markets, smartphones are the priority. In the business segment, Windows 10 refresh is expected to start toward the end of 2016,” the report said.
In turn, the demand for reliable mobile and broadband has also increased. A rough estimate from science website EurakeAlert.org revealed that the demand for broadband data will increase by a “thousand-fold” in 2020, the expected year for 5G’s utilization and initial commercialization.
The technological lacuna that 5G migration will create will also open doors to other market players in the internet niche such as network extender provider 5BARz International (OTCQB: BARZ). The company has gained immense industry reputation after convincing two of India’s largest network carriers that its revolutionary plug-and-play technology, the network extender, can efficiently help their customers obtain utmost mobile signal strength. This small niche also shows a large potential of growing into an indispensable market in the Internet-smartphone segment.
Gartner also said that the gap between smartphone and PC sales is expected to grow more in the years to come if there are no cutting-edge tech improvements in the PC segment. Another factor affecting PC sales is the improving dollar value that weakens most foreign currencies. Consumers who have only enough money on their hands end up utilizing it for portable and more efficient gadgets.
Lenovo remains the ringleader of the PC niche with 12, 484 total unit shipments in Q1 2016, followed by HP, Dell, Asus, and Apple. Apple still struggles to lead the market, but its sales were up by 6.4 percent from last year due to the new upgrades introduced to its operating system in the last quarters of 2015.
Samsung maintains its lead against Apple with 83,438 unit sales or 20.7 percent of the entire smartphone market sales in Q4 2015, up by 1.2 percent from the same period in 2014. Runners-up consist of Huawei, Lenovo, and Xiaomi.