PC sales slow ahead of Windows 10 launch

Leading up to the launch of Windows 10 this July, market research firm Canalys and GPU manufacturer Nvidia expect a decline in the PC market.

"We see a very soft market going into Q2," said Nvidia CFO Colette Kress. The company lowered its guidance from $1.18 billion to $1 billion for the second fiscal quarter in an earnings call with analysts.

Desktops

Analysts are lowering their expectations for the PC market, with Canalys reporting that desktop PCs are hit the hardest. Shipments of desktops fell by 13%, and the category is no longer benefiting from the boost driven by users migrating from Windows XP.

"The global PC market, including tablets, experienced an annual decline of 7% in Q1 2015, reaching 115.7 million units worldwide," the report read, noting that Apple was able to hold on to its first place position despite a 16% drop in PC shipments. Lenovo, HP, Samsung and Dell round out the top five PC manufacturers.

In addition to softening demand leading up to the launch of Windows 10 this summer, Canalys Senior Analyst Tim Coulling cited fluctuating exchange rates as a challenge, which "means PC market declines will be greater in the second quarter than they were in the first."

With DirectX 12 a standard supported by Windows 10, Nvidia hopes that the demand for graphics performance will help increase the number of new PC shipments this summer.

Notebooks

After holding steady for two consecutive quarters, notebooks experienced a small slip, falling 4%.

According to Canalys, notebooks face challenges on two fronts. On the Microsoft side, restrictions to the Windows with Bing program to notebooks with displays smaller than 14 inches may inhibit growth of more expensive, larger notebooks. On the Google side, inexpensive - and more powerful - Chromebook models are competing against less expensive Windows notebooks.

Tablets and hybrids

The tablet market is in decline due to weak demand in mature markets, high saturation and cannibalization from smartphones with large screen sizes. Canalys expects growth in the tablet market will likely result either from business purchases or replacements of existing devices.

Despite declines in the tablet market, shipments of convertible tablets have doubled year-over-year led by Asus, Lenovo and Acer. Canalys's views are in line with the recently released IDG report.

Hybrids, or convertible tablets, come with removable keyboard docks and are seen as more productive, versatile devices suitable for work and play. Examples include the Lenovo Yoga 3 Pro, Lenovo ThinkPad Yoga 12, Surface Pro 3 and Surface 3, Dell Venue 11 Pro 7000 Series and Acer Aspire Switch R11. Although a few hybrids ship with Google's Android operating system, many of these devices run Windows.

Adoption of two-in-ones will likely continue to grow with the release of Windows 10. Microsoft's Continuum feature comes with an adaptive user experience that makes it easy for these devices to switch between tablet and desktop modes.

• Read our review of Windows 10

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