PC sales are a disaster, but all is not lost

PC vendors are definitely in a pickle, as the market size everywhere continues to shrink, but there are areas of the industry that are still profitable, market analysts Gartner have said.

PC sales have recorded one of its lowest quarterly growth rates in Q1 2016, but ultramobiles are growing, and that's where the focus should probably be.

Ultramobiles (tablets, thin and lightweight PCs, convertibles) are expected to grow 16 per cent, to $34.6 billion, compared to 2015. Gartner predicts the ultramobile premiums will soon hold the largest part of the PC market in terms of revenue, forecast at $57.6 billion.

"The ultramobile premium market is also more profitable in comparison with the low-end segment, where PCs priced at $500 or less have five per cent gross margins," said Ms. Tsai. "The gross margin can reach up to 25 per cent for high-end ultramobile premium PCs priced at $1,000 or more."

There are two reasons why this segment is set for growth: 1) users will want to replace their traditional PCs, and 2) they will want to add new functionalities, such as the touch experience, which are offered by ultramobiles from the premium segment.

The average sales price (ASP) for these types of devices, especially in the premium segment, is not expected to drop rapidly, but it will eventually move towards the $600 mark, Gartner says, at least in the constant-currency terms.

Besides high-end ultramobiles, PC vendors could also look towards the IoT for growth, it was said.

"Vendors could detect with sensors if a battery is getting too hot or a hard-disk drive is being overworked, and they could send an alert to customers to get PCs checked before they suddenly go down," said Ms. Tsai. "This would save vendors' operating costs and also helps users with better service."

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