Oct 22, 2012

PC Shipments to Decline in 2012

According to analyst research firms Gartner, IDC and IHS, PC sales are expected to fall for the first time in over a decade. Since the third quarter of 2011, shipments have reportedly declined by 8.6 percent and analysts say it will continue to do so. “A continuing slowdown in consumer PC shipments played a big part in the overall PC market decline,” said Mikako Kitagawa, principal analyst at Gartner, in a statement. With the expected Windows 8 on its way, some believe that consumers are waiting for its release before purchasing a PC. “The third quarter was also a transitional quarter before Microsoft’s Windows 8 operating system release, so shipments were less vigorous as vendors and their channel partners liquidated inventory,” said Kitagawa. Kitagawa adds, “Retailers were conservative in placing orders as they responded to weak back-to-school sales. By the end of September, retailers were focused on clearing out inventory in advance of the Windows 8 launch later this month.” Research Director at IDC David Daoud also agrees saying analysts “expected a weak PC market in the lead up to Windows 8 release in the fourth quarter.” Regardless of the Windows 8 release, IHS says we should expect the PC market to contract by 1.2 percent to 348.7 million units – down from 352.8 million in 2011. “PCs are going through a severe slump,” said Jay Chou, senior research analyst at Worldwide PC Tracker, in an IDC statement. According to Daoud, while retailers wait for things like the Window 8 to be released before increasing inventory, consumers will look at alternative devices like tablets. “Nevertheless, as vendors line up innovative new products and designs, consumers are likely to respond positively during the tail-end of fourth quarter in 2012, and that means a potential return to positive growth at the end of this year,” adds Daoud. Although most vendors suffered, according to IDC, despite slowing growth in Asia, Lenovo continued to register the highest yearly growth among all top vendors. While IDC says Lenovo is just a couple share points [15.7 percent compared to HP’s 15.9 percent] from tying with HP for the lead in global shipments, Gartner disagrees claiming Lenovo took the number one position in worldwide PC shipments. HP was quick to respond to Gartner, however, issuing a statement saying: “While there are a variety of PC share reports in the market, some don’t measure the market in its entirety. The IDC analysis includes the very important workstation segment and therefore is more comprehensive. In that IDC report, HP occupies the No. 1 position in PCs.” IHS concludes their report with three important questions for the PC market:

How much will Windows 8 really have toward boosting the PC market in the fourth quarter?
Will continuing global economic concerns neutralize whatever hype or interest has been generated by ultrabooks?
Will mobile computing gadgets such as tablets and smartphones win over PCs during the crucial holiday selling season, taking precious consumer dollars and keeping PC sales at bay?

“The industry had already weathered a rough second quarter, and now the third quarter was even worse. A weak global economy as well as questions about PC market saturation and delayed replacement cycles are certainly a factor, but the hard question of what is the ‘it’ product for PCs remain unanswered,” said Chou.