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Brexit has had little impact on the PC market and the retail trade in the UK so far, analysts have claimed.
Isabelle Durand, principal research analyst at Gartner, said: "Declines in PC sales [during the second quarter of 2016] slowed to single digits in EMEA due to the end of the depreciation of the euro against the US dollar, and the related price increases in euros.
"Brexit has had no impact in the second quarter beyond the steadily weaker pound since the referendum was announced in 2015. However, post-Brexit sterling was sharply weaker against the dollar, and this will trigger price increases that will likely cause downward pressure on fourth-quarter sales in the UK.
"We remain cautious for 2016. Most companies will be focused on surviving the challenges of the next 12 months. The brightest spot in the market could perhaps be an increase in average selling prices, with good sales of high-end gaming PCs and hybrid laptops fuelling this change."
After the Brexit decision, the pound’s value fell. But the PC market was experiencing a price hike before that.
Mikako Kitagawa, principal analyst at Gartner, added: "One of the ongoing problems in the PC market has been the price hike in selected regions due to the weakening local currency against the US dollar.
"The price issue has impacted the EMEA and Latin America regions for the past year. However, PC shipment declines became rather modest in the second quarter compared with previous quarters, which suggests a fading currency impact."
Elsewhere, the British Retail Consortium and KPMG say that it’s ‘too early’ to assess any Brexit impact on retail sales.
In June, UK retail sales decreased by 0.5 per cent on a like-for-like basis from June 2015. Online sales of non-food products in the UK grew nine per cent in June versus a year earlier.
UK IT channel reacts to Brexit: 6 top comments from senior executives
Helen Dickinson OBE and chief executive of the British Retail Consortium, commented: "Britain’s retailers remain open for business. The EU referendum vote has not changed their relentless pursuit of delivering for customers day in, day out or their investment in meeting the needs of fundamental changes in the way people shop, driven by digital and technology.
"Despite the fall in the pound, the time it takes for any input price increases to translate into higher shop prices will depend on a combination of factors including further changes in the pound, commodity prices and the challenge for retailers to move pricing given the intensity of competition. So, there won’t be any instant shocks as any changes would take time to feed through."
David McCorquodale, head of retail at KPMG, added: "While the ramifications from the Brexit vote may well affect consumer confidence, retailers will be hoping the long-promised heatwave and potential stay at home holidays will be enough to drive shoppers back to the high-streets over the months ahead.
"With the referendum fallout still uncertain, retailers will need to make sure all channels are ready and resilient to cope with the impact of a Brexit.”
Why are PC sales continuing to fall?
Gartner, reporting its preliminary PC sales estimates for the second quarter of 2016, said that PC shipments in EMEA totalled 17.8 million units during the period, a decline of 4.3 per cent from the same period in 2015.
In Germany, PC demand was ‘slow’, recording further declines despite a strong domestic economy. The PC market in France was impacted by consumer discretionary spend flowing toward televisions ahead of the European Cup football tournament, as well as Lenovo’s stock issue in the channel.
The overall PC market across both Eastern Europe and Eurasia has been the weakest spot in EMEA, with demand in central Europe continuing to decline.
"Many users still don’t see any compelling reason to upgrade their existing PCs," Gartner said in a statement.
"Demand from consumers and businesses alike has been very cautious, as few find reasons to upgrade their existing hardware. High political instability in the Middle East and North Africa as well as the seasonal impact of Ramadan drove the sixth consecutive quarter of decline."
Data includes desk-based PCs, notebook PCs and ultramobile premiums, but not Chromebooks or iPads.
Worldwide PC shipments totalled 64.3 million units in the second quarter of 2016, a 5.2 per cent decline from the second quarter of 2015. This was the seventh consecutive quarter of PC shipment declines, but Gartner analysts said the market is showing some signs of improvement.
In the US, PC shipments totalled 15.2 million units in the second quarter of 2016, a 1.4 per cent increase from the second quarter of 2015.
A smart future?
While PC sales are falling, Canalys forecasts that 7.5 million smart watches with cellular connectivity will ship in 2016, rising to 53.6 million in 2020.
This represents a compound annual growthrate of 63 per cent from 2016 to 2020. So could smart watch wearables end up being a real hit?
"In the short term, shipments are likely to be driven by a new Apple Watch with cellular connectivity," Canalys sad in a statement.
"Samsung and LG have been very aggressive in bringing new cellular technologies to market, with smart watches such as the Gear S2 classic 3G/4G and the Watch Urbane 2nd Edition LTE, and will also play significant roles. Both the Tizen and Android Wear smart watch platforms already support cellular connectivity."
Daniel Matte, Canalys analyst, added: "The phase 2 eSIM specification will enable more independent smart watches with a smoother user experience around cellular connectivity. Users will soon be able to easily choose among cellular providers and pay for monthly service.
"Many more smart watches with LTE and GPS/GNSS will also be released this year, thanks to the availability of new LTE Category 1 chipsets."
After a full year of availability, these new technologies will have the biggest impact on shipments in 2017, Canalys predicts.
"It reckons integration of additional health and fitness sensors, expanded activity tracking and battery life improvements will further drive smart watch growth over the next few years," the firm added in a statement.
"Though hardware and software constraints have limited growth until now, the app ecosystems around watchOS and Android Wear will accelerate over the medium term."
