IDC Korea forecasts domestic PC shipments in the third quarter of 2015 to reach 990,000 units, a 4.6% decrease year-on-year.

According to a recent domestic PC market survey by IDC Korea ( http://www.kr.idc.asia ), domestic PC shipments in the third quarter of 2015 totaled 990,000 units, marking the first time in nearly 10 years that quarterly shipments fell below 1 million units since recording 920,000 units in the second quarter of 2005. With 530,000 desktops and 460,000 laptops shipped, shipments decreased by 5.4% and 3.7% respectively compared to the previous year, while total PC shipments fell by 4.6%.

▲ Domestic PC quarterly shipments, Q1 1995–Q3 2015 (thousands of units) Source: IDC, 2015

The consumer segment recorded 520,000 units, a 7.7% decrease from the previous year. This was because, as channel inventory increased due to the aftermath of MERS in the second quarter, the company adjusted shipments in the third quarter and focused on sales to clear inventory.

Quarterly sales dropped below 1 million units for the first time in nearly 10 years since recording 920,000 units in the second quarter of 2005.

As channel inventory has recovered to stable levels as of November, shipments are expected to return to normal in the fourth quarter and the first quarter of next year. The public education sector shipped 120,000 units, a 10.5% increase year-over-year. In the public education market, most replacement demand was concentrated in the first half of the year due to XP migration in 2014, so demand decreased significantly in the second half.

▲ Table. Domestic PC shipments by market segment, Q3 2014–Q3 2015 (thousands of units) Source: IDC, 2015

Therefore, the growth in the third quarter of 2015 was due to the base effect of the previous year, and when combined from January to September 2015, public education shipments totaled 400,000 units, a decrease of 17.8% compared to the previous year. However, during the same period, notebook shipments increased by more than 30% to 72,000 units compared to 55,000 units in the previous year, indicating a rapid transition to a mobile computing environment.

The enterprise sector shipped 350,000 units, a 4.3% decrease from the previous year. Due to increased uncertainty in export conditions, IT investment remains limited. Furthermore, as PC lifespans are extended and small volumes are purchased as needed through annual unit price contracts rather than large-scale orders, it is expected that it will take some time for the market to recover.


▲ Domestic laptop and tablet shipments, Q3 2015 (thousands of units) Source: IDC, 2015

230,000 ultra-slim laptops with a thickness of 21mm or less were shipped, surpassing 50% of total laptops for the first time. User preference continues to rise as processor computing and graphics performance improve and battery life increases, while screen sizes are also diversifying from a focus on 13-inch models to 14 and 15-inch models, expanding consumer choices. With the arrival of the 2016 back-to-school season, the expansion of the ultra-slim laptop lineup equipped with Intel's 6th generation Skylake and Windows 10 is expected, which is anticipated to accelerate the transition to mobile computing.

Controls in consumer channel shipments, extended PC lifespans, and reduced IT investment are the causes of the market decline.

Meanwhile, as of the third quarter of 2015, 450,000 tablets and 460,000 laptops were shipped, forming a similar scale. There are differences in purpose of use, as tablets are primarily used for content consumption and education, while laptops are mainly used for entertainment and productivity tools. As a result, the current lineup consists mainly of 7- to 10-inch tablets and 11- to 15-inch laptops.

"With the introduction of productivity-enhanced tablets such as the Surface Pro 4 (12.3-inch), iPad Pro (12.9-inch), and Surface Book (13.5-inch) to the market, competition between ultra-slim laptops and tablets with detachable keyboards is expected in the 12-13 inch market in 2016," said Sang-Jun Kwon, a senior researcher at IDC Korea. "To gain a head start in the smart connected device market, ranging from PCs and tablets to smartphones and wearables, it is becoming increasingly important to provide solutions that meet usage purposes, such as content consumption, data synchronization, and app compatibility between devices."