Why the back to school season will promote desktop growth

Year-on-year volume declined by 14 per cent in April 2015
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EDUCATION SECTOR SPOTLIGHT: Mehryar Hamid, senior account manager IT at GfK, takes us through the highs and lows of the desktop market, and why he expects it to improve…

The UK PC market has been experiencing a boom since August 2014 following a series of initiatives to invigorate growth at the low end of the market. What was initially a programme to curtail the growth of devices with cloud based operating systems, quickly ended up kick-starting the long delayed replacement cycle for both notebooks and desktops.

The attractive offerings in the sub-£250 price-point quickly made it one of the largest segments of the PCs market.

Despite these initiatives, desktops have had a story of their own going as far back as August/September 2013. In the run up to two major console launches in Q4 2013, PC gaming was under the spotlight and that’s when we first saw signs of recovery in the desktop market. In a matter of months the market was in both double-digit volume and value growth, with the value growth outstripping the volume growth due to the high end, high performance devices being bought. In a rush to capitalise on this growing opportunity several vendors offered competitive and attractive offerings that kept the market buoyant. However, as we moved towards the summer of 2014 these growth rates began to slow down. The initiatives to drive growth at the entry levels were quite timely in that they gave a further boost to the market and desktops continued to ride the wave until Christmas 2014.

In Q1 2015 this wave began to subside and the category finally went into year-on-year decline in March 2015. As year-on-year volume and value contracted 14 per cent and 23 per cent respectively for the month of April 2015, industry watchers were quick to state that the decline in desktops was here to stay.

Although desktops will no longer display double digit growth rates and will struggle to match the numbers from 2014, the category is far from being written off for the rest of 2015. The impending launch of a major operating system in the run up to the back-to-school period will most certainly provide some impetus to the category which traditionally is at its highest share at that time of the year.

As the initiatives to grow the sub-£250 side of the market cool down, the average selling prices for notebooks will begin to creep up leaving more space for desktops to compete at the entry level. The high-end all-in-one (AIO) desktop segment is also witnessing a lot of investment and could help drive value for the category. The changing retail dynamics in the UK retail channels will also play their part with Black Friday and Cyber Monday expected to be as big a phenomenon as they were in 2014”. 

Mehryar Hamid is a senior IT account manager at GfK. 

www.gfk.com/uk

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