Hardware

Windows 10 will fail to spark PC recovery in 2016 as businesses push back upgrades

PC sales will not - as expected - stage a long-awaited comeback in 2016 but will continue to drop according to new estimates.

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Source: Gartner
The uptick in PC sales expected to follow the recent release of Windows 10 won't take place this year, as economic uncertainty and a lack of new devices stem the rate of PC upgrades.

The turnaround in the multi-year slump in PC sales now won't take place until 2017, according to an updated forecast from analyst house Gartner.

Instead of the forecast recovery, PC sales will "bottom out" in 2016, according to Gartner, with shipments expected to fall to 284 million, a decline of 1.5 percent year on year.

This continued drop stems from manufacturers failing to release Windows 10 PCs that have compelling new features, such as thin tablet/PC convertibles, according to Gartner research director Ranjit Atwal.

"We didn't see many Windows 10 devices and new form factors during the fourth quarter [of 2015]," he said, highlighting the need for more Microsoft Surface-type devices.

Businesses are also being cautious about upgrading PCs to new Windows 10 machines, partly because IT budgets are being squeezed and partly because of the time it takes to upgrade at scale.

"It's to do with current budget restrictions as much as anything. They [budgets] are not being made available," he said, adding that PC refreshes are being pushed into 2017.

When surveyed earlier this year, TechRepublic's CIO Jury were more bullish, with many saying their organization would begin the upgrade to Windows 10 this year.

However, businesses are telling Gartner they are keen to upgrade to Windows 10 once they have finished testing and evaluating the OS.

"They can see the benefits of having a new operating system that allows them to integrate the device with other large projects around cloud, mobility or security."

Earlier this year, analyst house IDC said the release of Windows 10 had slowed sales of new PCs, as some owners of Windows 7 and 8 machines took advantage of the free upgrade to Windows 10 instead of buying a new device.

PC vendors also need to do a better job of selling new machines, said Gartner's Atwal, and with getting the message across of how battery life and portability have improved in laptops over the past five years.

"Look at what Apple has done with Apple Stores. There's a lot more investment essentially in terms of selling to the end user. By contrast the PC industry still isn't there yet."

Smartphone setback

Smartphone sales won't compensate for the continued decline of the PC market, according to Gartner, with the analyst forecasting that global shipments will be limited to single-digit growth for the first time in history.

The analyst predicts that 1.5 billion units will be shipped in 2016, a seven percent increase from 2015.

"The double-digit growth era for the global smartphone market has come to an end," Atwal said.

Across all computing devices — PCs, tablets, ultramobiles and mobile phones — worldwide shipments are expected to reach 2.4 billion units in 2016, a 0.6 percent increase from 2015. However, the amount spent on these devices is estimated to fall by 1.8 percent year on year.

"Prices did not decline enough to drive upgrades from low-end feature phones to low-end smartphones," said Annette Zimmermann, research director at Gartner. "Vendors were not able to reduce the price of a "good enough to use" smartphone lower than $50."

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About Nick Heath

Nick Heath is chief reporter for TechRepublic. He writes about the technology that IT decision makers need to know about, and the latest happenings in the European tech scene.

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