IDC Korea reports solid performance compared to the 12.5% growth in global PC shipments in the first quarter.
Shifting the focus of open markets to sales and offline channels to profit.

According to a recent analysis of the domestic PC market by IDC Korea, domestic PC shipments in the first quarter of 2016 were 1.53 million units, maintaining the level of the previous year.

Compared to the 12.5% decline in the global PC market in the first quarter, the domestic market is analyzed to be relatively robust due to the expansion of ultra-slim laptops with a thickness of 21mm or less and increased demand in the education sector. On the other hand, PC shipments in the enterprise sector decreased by 9.0% year-on-year due to reduced IT investment resulting from weakening export conditions, and desktops still account for over 70% of the market share in terms of cost and security.

Looking at the breakdown by product type, 520,000 ultra-slim laptops were shipped, a 28.1% increase year-over-year, reaching an all-time high with 57.3% of the total laptop market share. 11-inch models featured eMMC to lower prices and enhanced portability through cloud connectivity, while products 12 inches and larger focused on improving computing performance by primarily equipping them with SSDs.


▲ PC shipments by domestic market, 2015Q1 vs. 2016Q1 (thousands)


▲ Domestic PC Shipments by Product, 2015Q1 vs. 2016Q1 (thousands of units)

For ultra-slim models, the 13-inch segment accounted for the largest share at 42.3%, while 15-inch products with improved design and reduced weight also grew rapidly, expanding their share to 37.6%. On the other hand, while all-in-one desktops shifted to larger screens ranging from 21 inches to 23 inches, shipments decreased by 1.8% year-on-year due to the absence of Microsoft's Bing products.

It is important to increase value by bundling hardware and services.

By market, the public and education sectors saw shipments fall by 16.2% to 530,000 units in 2015 due to early replacements resulting from XP migration in 2014, but demand is expected to recover somewhat this year. Following the first quarter, outdated PCs in schools are scheduled to continue being replaced in the second quarter, and demand from local governments and military units is expected to arise, with a steady increase in demand for laptops in particular.

Open markets are driving sales and volume in conjunction with mobile shopping, while offline retail channels are focusing on the sale of mainstream and premium products with a focus on profitability. To strengthen sales for small and medium-sized enterprises, collaboration and strategy with channel partners are becoming increasingly important, and as the profitability of hardware itself decreases, there is a need to transition to a method of bundling services together and proposing them.

"As PC demand declines and competition among companies intensifies, hardware revenue is bound to decrease," explained Sang-Jun Kwon, a senior researcher at IDC Korea. "It will become increasingly important to enhance value by bundling hardware and services and to defend or enter the market through collaboration with channel partners."