Windows migration helping drive growth in the PC market

The threat of Windows 7 support ending is driving migration to the latest Microsoft OS and supporting investments in fresh PC hardware with the market bouncing back from a couple of quarters of decline to deliver growth in Q2.

According to the latest figures from Gartner and IDC the PC market returned to the black, with the analyst houses deeming it to improve year-on-year by 1.5% and 4.7% respectively in Q2.

Not only have users been migrating to the latest Microsoft OS but the CPU shortages that have plagued the market for the past few quarters are also easing.

“Worldwide PC shipments growth was driven by demand from the Windows 10 refresh in the business market in the second quarter of 2019. Desktop PC growth was strong, which offset a decline in mobile PC shipments,” said Mikako Kitagawa, senior principal analyst at Gartner.

“Additionally, there are signs that the Intel CPU shortage is easing, which has been an ongoing impact to the market for the past 18 months. The shortage mainly impacted small and midsize vendors as large vendors took advantage and continued to grow, taking market share away from the smaller vendors that struggled to secure CPUs," she added.

That view was echoed at IDC, which saw the end of Windows 7 support in January next year as a major catalyst for some of the shift towards Windows 10.

"With the January 2020 end of service date for Windows 7 approaching, the market has entered the last leg of the Windows 7 to Windows 10 commercial migrations," said Linn Huang, research vice president, Devices & Displays at IDC.

"However, the closing sprint is unlikely to generate the spike seen when Windows XP met its end of service because we are further ahead of the migration with two quarters to go. Still, organizations looking to finish their migration will create new opportunities for the market in the coming quarters," she added.

IDC reported that after two quarters of decline EMEA saw growth in the traditional PC market in the second quarter with Windows migration and backlogs caused by CPU shortages helping create that result.

The main potential problem looking foward is the possible impact of the US and China trade war. Although it did not have an impact in Q2 with a lot of the hardware manufacturing in China the prospects of price rises if tariffs bite cannot be ruled out.

"Most laptops and tablets are currently manufactured in China and sales of these devices in the U.S. could face significant price increases if the punitive tariffs are imposed and vendors do not take quick action to respond,” said Gartner's Kitagawa.

both analyst houses agreed that Lenovo kept its position at the top of the charts in terms of vendor PC shipment stats with 25% market share. HP is biting at its heels with around 23% and then Dell is in third with 17%.

Gartner found that the top three vendors accounted for 64.1% of global PC shipments in the second quarter of 2019, underlining their dominance in the market.