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By | Alexander J Martin 18th May 2016 15:55

The PC is dead. Gartner wishes you luck, vendors

Specifically, get in on that ultramobile premium market. You know, for gamers...

The PC market is doomed. We know this. You know this. Gartner knows this, but it reckons vendors can bleed out a few more pennies if they start selling high-end rigs for gamers.

"PCs are no longer the first or only devices users are choosing for internet access," said Meike Escherich, principal research analyst at Gartner.

Shipments of PCs have sunk over the last five years - in revenue terms, not literally - from 343 million units in 2012 to an estimated 232 million units in 2016. Escherich stated: "In terms of revenue, the global PC market has contracted from $219bn in 2012 to an expected $137bn in 2016."

Gartner and IDC both reported on the ongoing decline in PC shipments back in April, blaming the rising interest in smartphones when households dig into their pockets to spend on tech.

Vendors are struggling. Acer, which notably made less than £1m profits in Q1, Fujitsu, Samsung, Sony, and Toshiba managed to lose more than 10 per cent market of their market share since 2011, Dell, HP, and Lenovo gained their market share but still recorded year-over-year declines in 2016 Q1.

Doom and Gloom

Despite this, the "ultramobile premium" market segment is looking like it'll manage to achieve some actual revenue growth this year, reaching what Garnet estimates will be $34.6bn, an increase of 16 per cent from 2015.

Garner reckons by 2019, it'll be the largest segment of the PC market in revenue terms, account for just under $58bn in revenue.

"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 Tracy Tsai, research vice president at Gartner. "The gross margin can reach up to 25 per cent for high-end ultramobile premium PCs priced at $1,000 or more."

Of course, the gaming PC market remains tiny, with only a few million units sold each year, though the average selling price (ASP) of high-end machines is a significant bit of cash up on a nongaming PC. ASPs range from $850 for an entry-level gaming PC notebook to $1,500 for a premium model.

"The high-end, purpose-built gaming PC segment (for example, $1,000 or more) is where PC vendors should focus for long-term profitability, despite this segment's competitiveness," said Tsai.

Of course, if that won't save your business, there's always the IoT market, as Gartner notes in its report titled Market Trends: Three Key Strategies to Increasing Profits in the PC Market. ®

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