Much is changing in the PC market, but at the same time some things remain constant. During 2018, overall PC sales are expected to continue their decade-long decline. However, market leaders Microsoft and Apple will continue their quarter of a century dominance over PC sales.
Analyst firm Moody's Investor Service made the prediction. The company says a push towards portable devices will harm the PC industry as a whole, but certain market segments will do well. Microsoft's Surface devices fit nicely into that growth area.
Moody's points out the company's Cloud business and Surface sales have been good during 2017. That is expected to be a trend heading into 2018 and will last throughout the year. Apple has always had a more niche marketplace, driven by core fans of the company's devices.
In 2018, Cupertino should maintain consistent sales and remain below Microsoft in the PC market.
The analyst expects a 3.5%-4.5% revenue growth next year, although this drops to 2.5%-3.5% if Apple and Microsoft are removed from the equation. In terms of operating profit, the forecast is 6%-7% growth (5.5%-6.5% without the two companies):
“The two companies collectively account for about half of the operating profit for the 24 companies that represent a proxy for the diversified IT sector.”
Equipment and software purchases will spur growth, specifically through the ongoing migration to cloud-based systems and legacy IT infrastructure:
“Equipment and software purchases and services related to the ongoing migration to cloud-based IT systems from legacy IT architecture will serve as a tailwind,” says Richard Lane, Senior Vice President at Moody's. “Growth in Software-as-a-Service revenues now more than offset the declines in license revenues.”
Premium Ultramobile Driving Growth
Back in October, research firm Gartner said PC sales will still increase based on one category in the coming years. So-called Premium Ultramobile devices will spur a market uptake over the next two years. However, overall PC sales will still be below the numbers seen even in 2016.
Microsoft is one of the companies pushing the Premium Ultramobile category with its Surface devices. 2-in-1s and convertibles have become popular computing tools for users who want portability without losing the full computing power of a desktop PC.