It’s really ugly in the PC market right now. How ugly? About the worst it has ever been, according to new reports from a couple of tech research firms.
Lenovo is one of the few companies not being crushed by weak PC demand.
(Credit: Josh Miller/CNET)
First-quarter global computer shipments dropped 14 per cent from the previous year, according to the International Data Corporation (IDC), much worse than its forecast of a 7.7 per cent decline. The pullback marked the worst-ever quarter since IDC began tracking quarterly PC shipments in 1994, and it’s the fourth consecutive quarter of year-over-year shipment declines.
Rival tech research firm Gartner, meanwhile, said its data showed an 11 per cent decline in first-quarter global PC shipments, with the number falling below 80 million units for the first time since the second quarter of 2009.
All regions dropped in the period, despite improving economic conditions in some areas, IDC and Gartner said.
As if that wasn’t enough, the main factor expected to boost the PC market — the release of Microsoft’s Windows 8 — actually hurt computer shipments. And even if people desire PCs with touchscreens, they still cost too much and suffer from component shortages. IDC noted that innovations being pushed by PC makers are actually being viewed by consumers as “cumbersome or costly”.
Here’s what IDC analyst Bob O’Donnell had to say:
While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the [user interface], removal of the familiar Start button and the costs associated with touch have made PCs a less attractive alternative to dedicated tablets and other competitive devices. Microsoft will have to make some very tough decisions moving forward if it wants to help reinvigorate the PC market.
PC sales have been weak for quite some time, with quarterly results from computer and semiconductor makers reflecting the hard times. The sector is not only being hurt by the weak economy, but also by consumers opting for mobile devices instead of traditional PCs. Microsoft’s latest OS was expected to boost sales, but it’s clearly struggling, as IDC noted.
Shipments fell across all regions, with both the US and the Asia-Pacific region, excluding Japan, down 13 per cent from the previous year, according to IDC. Europe, the Middle East and Africa tumbled in the double digits on a percentage basis, and consumer shipments remain weak in Japan.
It’s tough to find many bright spots in the report. IDC analyst David Daoud noted one piece of positive news comes from Asian manufacturers gaining more traction in newer markets. Lenovo, Samsung and Asus “have bucked the trend” by “identifying the opportunities and weakness of competitors, and executing appropriately and intelligently,” Daoud told CNET.
However, the three companies remain relatively minor players, especially in the US market, with only Lenovo cracking the top five. Its shipments in the US jumped about 13 per cent in the first quarter, according to IDC and Gartner, but its global shipments were flat. Gartner noted Lenovo’s growth rate was the slowest since the first quarter of 2009, largely because of a shipment decline in the Asia-Pacific region. Lenovo remained No. 2 for global shipments behind Hewlett-Packard, according to IDC. Gartner estimated that the two companies were in a “virtual tie” for the title of top PC vendor.
Lenovo said in a statement that while it continues to outperform the traditional PC competition and sees plenty of room to take share, it is also well-positioned in markets outside of traditional computers. That includes smart connected devices such as tablets and smartphones. The company noted that it’s the number 3 player in smart connected devices worldwide, according to IDC.
“We have already broadened our focus to this space, and we have the PC plus products (such as tablets and smartphones) consumers want,” a Lenovo spokesman said. “While our initial success is clearly validating this drive, we are also working hard to improve our performance on this new metric.”
For Samsung, part of its success comes from Chromebooks. Such devices, based on Google’s Chrome operating system, remain a small part of the market, but they continue to grow each quarter, Daoud said.
Meanwhile, HP, Dell and Acer again posted steep declines. For HP, its shipments tumbled 24 per cent globally and 23 per cent in the US, according to IDC and Gartner. The latter noted HP’s shipment decline was the worst since its acquisition of Compaq in 2003.
Acer, which has been struggling with the demise of the netbook market, posted the sharpest drop, with its worldwide shipments down 31 per cent, according to IDC, or 29 per cent, according to Gartner.
The numbers from Gartner and IDC are typically similar, but they differed greatly in one regard: Apple. IDC said its shipments slid 7.5 per cent as the iPad hurt sales of its computers. But Gartner said Apple’s sales rose 7.4 per cent.
All in all, PC makers are sure to be taking a close look at their strategies for addressing consumer demand, with no sign that the declines will end anytime soon.
“It was a perfect storm,” Daoud said. “Really, there’s no one single thing we can point to and say is the culprit. It was all over the map.”
Via CNET.com
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