How will Brexit affect the desktop market?

GfK senior IT account manager Kit Lewin provides a snapshot of the PC market in the post-Brexit world
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GfK senior IT account manager Kit Lewin provides a snapshot of the PC market in the UK, looking at back to school, Brexit and Black Friday…

With a slow first five months of the year, it is important to look forward to the second half of 2016 and what this could hold for desk computing. 

Crucial selling periods around back to school and Black Friday offer key opportunities for growth within this market. However, following the ‘leave’ vote outcome to the EU referendum, the outlook for the second half of 2016 is expected to be negatively impacted by the result, which will hit retail sales in the second half of 2016. 

In addition to this, the fluctuations that have been seen in the currency markets, with the pound hitting a 31-year low against the US dollar, are expected to drive increased prices for PCs, with the first impact being felt in the last quarter of this year.

So far, 2016 has been a tough year for total sales of PCs in retail channels.

Following the strong growth in the total market that was seen in 2015, volumes across the market as a whole have been down 5.5 per cent for the year-to-date (January to May 2016). 

“So far, 2016 has been a tough year for total sales of PCs in retail channels.”
Kit Lewin, GfK

One category that has struggled in the early part of 2016 is desk computing, which has led the decline with a 7.4 per cent volume drop year-on-year. Despite strong growth in some of the newer form factors such as mini and micro, which have seen 100 per cent volume growth year-on-year, the market is still dominated by the desk and tower, as well as all-in-one (AIO) form factors that have pushed the market into decline. 

After a strong overall performance in 2015, the key value driving the AIO form factor has struggled across the first five months of the year. This form factor is down 10.3 per cent in volume terms across the year. Despite this, the second half of the year offers hope with the back to school period historically being the key selling period for this form factor, with 27 per cent of 2015 volume sold within this promotional period. 

Manufacturers and retailers are expected to provide greater focus on this back to school period, and a successful performance in this period would help to aid a market recovery across the year as a whole.

The decline seen in the AIO form factor has been coupled with the strong declines in the traditional desk and tower side of the market. The form factor is down 23.1 per cent in volume terms and this steep decline is forecast to continue throughout the remainder of the year. 

One positive from this market has been the rise in average selling prices, which are 12.7 per cent higher year-on-year. This trend has been driven by increased amounts of premium product being sold in the market, largely driven by the buoyant gaming desktops market. The release of virtual reality technology, as well as gamers becoming increasingly aware of the benefits of using high-end desk PCs over their console rivals, have been major drivers behind the growth that has been seen across 2016.

About the author

Kit Lewin is an IT senior account manager at GfK. For more information on the UK PC market and post-Brexit forecasting, please contact Kit at kit.lewin@gfk.com

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