Shipments of new personal computers, most of them equipped with Microsoft Windows, will decline more in 2014 than thought a few months ago, researcher IDC said Tuesday.
IDC said that PC shipments will drop by 6% from the year before to approximately 296 million, a smaller number than it forecast three months ago, when it said global shipments would decline 4% in 2014.
Last year, shipments contracted by 10% compared to 2012, dropping to about 315 million new PCs.
IDC revises its numbers quarterly, said Rajani Singh, an analyst with IDC, who pointed out that as the market changes, the company modifies its forecasts, sometimes up, sometimes down.
There's been a lot more down than up lately.
In 2013, both IDC and rival Gartner revised their predictions for the year several times, each time by lowering their forecasts and increasing the year-over-year contraction.
Is that what the market can expect in 2014?
"I do think that this contraction will eventually fade away," said Singh in an interview Wednesday. "The market will start showing some stabilization. I'm not bullish, but there are signs of a recovery [from the constant contractions]."
If IDC is right and shipments total about 296 million PCs, that would put the business behind 2008, when approximately 300 million shipped from factories. That was more than a year before the appearance of Apple's iPad, one of the causes of the tectonic shift from personal computers to more mobile devices, including smartphones and tablets, and a long way from "Peak PC" of 364 million in 2011.
IDC now expects that annual shipments will come in under the 300-million mark through 2018, as far out as it dared to forecast, when the total will be about 292 million.
Singh argued that that number is still huge. "That's 300 million fresh PCs to ship this year," she said of 2014.
True. But for an industry predicated on growth, it's dismal news. Microsoft, which derives a big chunk of its revenue and an even larger percentage of its profits from licensing Windows to OEMs (original equipment manufacturers), will face an impossible task trying to grow the former.
Amy Hood, Microsoft's CFO, is expecting tough times in the near-term. In January, when she outlined her guidance for the March 2014 quarter, she said the group responsible for licensing Windows to OEMs would bring in between $4.1 and $4.3 billion in revenue, which would be between 1% and 6% less than the same quarter in 2013.
"There is little question that the PC market remains a drag on Microsoft, and the company's own statements reflect that," said Singh in a note she wrote to clients several weeks ago.
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