GfK: Are touchscreen laptops the best of both worlds?

May 2013 showed some promising results for IT, with year-on-year growth rates of 22.4 per cent in volume and 4.1 per cent in value compared to last year. This growth was mostly contributed by the B2B channel which grew by 58 per cent in volume and 6.5 per cent in value. The consumer channel showed mixed results growing by 2.5 per cent in value but declining by 1.7 per cent in volume.
Media tablets, software and communication devices were the biggest drivers of growth in the IT market. Media tablets grew by 82 per cent in sales units year-on-year in the Consumer Channel. Tablets growth is declining and may not be the engine of growth for IT for much longer. In March and April, the PC market survived the impact of various factors affecting its growth. However, in May, it suffered from decline.
Unit sales of notebooks dropped by 7.6 per cent in May compared to the same period last year in the consumer channel, however sales value only dropped by 6.1 per cent. This is the first month in 2013 when notebooks have shown growth in the average selling price (ASP) when compared to last year. Growth in ASP can be attributed to the availability of higher spec models at a more affordable price. Internal research on price and demand elasticity shows that £350 is a sweet spot for the PC market. There is a significant spike in sales as soon as high spec models come closer to the £350 price point. Given the ASP drop in high spec models to match consumers’ affordability, incremental innovation is critical to keep the PC market into growth.
The touchscreen interface has travelled all the way from 3.5-inch screen size format smartphones to 9.7- inch screen size format tablets. Initial touchscreen PCs sales have been positive. The question is can touchscreen give that incremental value growth to PCs in the long term? Sales value share was between six per cent and seven per cent of the notebooks market in the last three months. Initial success has been mostly in 11.6-inch, and prices are close to £350. Justifying the value for dual interface PCs on the large screen size format like 14-inch is a challenge.
There have been major game console launches this year and lots of smartphone launches are also scheduled throughout the second half of 2013. The challenge for touchscreen PCs is to justify their value and maintain sales growth in the long term, whilst maintaining a price premium and thus satisfying both manufacturers and consumers.

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