Gartner and IDC: PC shipments continued to slide in Q3, but the worst may be over

The PC market has been on the decline for the past year, but there are new hints that the situation is improving -- if only slightly. Both Gartner (shown here) and IDC estimate that worldwide computer shipments dropped roughly eight percent year-over-year in the third quarter. While that's not exactly comforting to vendors, it's better than the double-digit losses of the past several months; the analyst groups even saw flat or positive growth in countries like Japan and the US. Any further declines in some regions may be relatively gentle, Gartner says.

As for who's out in front? Heavyweights like Lenovo, HP and Dell grew thanks to improving business sales and some advance shipments of Windows 8.1 PCs. Acer and ASUS, meanwhile, were dealt the worst blow as their netbook sales continued to suffer from the rise of mobile OS tablets. Neither Gartner nor IDC is predicting a turnaround for the industry, but they suggest that PC builders are finally figuring out their places in a world where mobile devices rule.

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Gartner Says Worldwide PC Shipments in the Third Quarter of 2013 Declined 8.6 Percent

The 'Back-to-School' Sales Quarter Experienced Its Lowest PC Volume Since 2008

October 09, 2013 04:43 PM Eastern Daylight Time

STAMFORD, Conn.--(BUSINESS WIRE)--Worldwide PC shipments totaled 80.3 million units in the third quarter of 2013, an 8.6 percent decline from the same period last year, according to preliminary results by Gartner, Inc. This marks the sixth consecutive quarter of declining worldwide shipments.

"Consumers' shift from PCs to tablets for daily content consumption continued to decrease the installed base of PCs both in mature as well as in emerging markets. A greater availability of inexpensive Android tablets attracted first-time consumers in emerging markets, and as supplementary devices in mature markets."

"The third quarter is often referred to as the 'back-to-school' quarter for PC sales, and sales this quarter dropped to their lowest volume since 2008," said Mikako Kitagawa, principal analyst at Gartner. "Consumers' shift from PCs to tablets for daily content consumption continued to decrease the installed base of PCs both in mature as well as in emerging markets. A greater availability of inexpensive Android tablets attracted first-time consumers in emerging markets, and as supplementary devices in mature markets."

HP and Lenovo have been virtually neck and neck for the top global position in the PC market. Lenovo took the lead, as it did last quarter, but the upcoming holiday sales season will be a key battlefield for both companies. Lenovo accounted for 17.6 percent of global PC shipments in the third quarter, and HP had 17.1 percent of shipments, according to preliminary results (see Table 1).

Weakness in the Chinese market continued to affect Lenovo's overall growth. However, strong growth in the Americas, as well as EMEA, offset the declining PC shipments for Lenovo in the Asia/Pacific market. HP recorded positive shipment growth in 3Q13 for the first time since 1Q12. With the exception of Latin America, HP's growth exceeded the average growth across all regions.

Dell's PC shipments exceeded growth rate averages across all regions. Acer's shipments declined 22.6 percent compared with a year ago, as a reduction in netbook shipments impacted overall PC shipment results. Acer has heavily sought opportunities in other device markets. Asus saw PC shipments decline 22.5 percent. Asus has clearly shifted its focus from PCs to tablets. Asus' tablet shipments were nearly equal to its mobile PC shipments in 3Q13.

In the U.S. market, PC shipments totaled 16.1 million units in the third quarter of 2013, a 3.5 percent increase from the same period last year, registering the second consecutive quarter of shipment growth after six quarters of decline (see Table 2). Low inventory from the first half of 2013, and the introduction of new models with Intel's Haswell and new form factors brought the sell-in shipment up compared with a year ago.

"The positive U.S. results could mean that seasonal strength and channel fill for new product launches in 3Q13 finally overcame the structural decline," Ms. Kitagawa said. "Even though 3Q13 shipments were compared with artificially weak 2Q13 because of inventory control for the Windows 8 launch at the time, the 3Q13 results imply the U.S. market may have passed the worst declining stage, which started in 2010. The shrinking installed base of PCs has also passed the steepest decline phase because the structural change has progressed fairly quickly. Tablets will continue to impact the PC market, but the U.S. PC market will see a more moderate decrease rather than a steep decline in the next two years."

PC shipments in EMEA totaled 22.4 million units in the third quarter of 2013, a 13.7 percent decline from the same period last year. The EMEA region suffered its sixth consecutive quarter of declining PC shipments. All areas of the region - Western Europe, Eastern Europe and the Middle East and Africa - showed a shipment decline. PC shipments across all of Eastern Europe remained weak due to the ongoing popularity of tablets and some weakening of the Russian Ruble versus the euro and U.S. dollar, which led to a PC price increase.

In Asia/Pacific, PC shipments were at 28.1 million units in the third quarter of 2013, an 11.2 percent decline from the third quarter of 2012. The region was hampered by the currency volatilities, especially in India and Indonesia, where currencies plunged to record lows. Vendors were also mindful of Windows 8.1, new models based on Intel's Bay Trail that will start shipping the following quarter. Therefore, they were careful in managing inventory.

These results are preliminary. Final statistics will be available soon to clients of Gartner's PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe. Additional research can be found on Gartner's Computing Hardware section on Gartner's website at http://www.gartner.com/it/products/research/asset_129157_2395.jsp.

PC Market Beats Expectations with Mild Improvement in Business Outlook, According to IDC

October 09, 2013 04:00 PM Eastern Daylight Time

FRAMINGHAM, Mass.--(BUSINESS WIRE)--Worldwide PC shipments totaled 81.6 million units in the third quarter of 2013 (3Q13). In year-on-year terms, the market contracted -7.6%, ahead of a projected decline of -9.5% for the quarter, according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker. While shipments remained weak during the early part of the quarter, the market was somewhat buoyed by business purchases, as well as channel intake of Windows 8.1-based systems during September.

"The third quarter was pretty close to forecast, which unfortunately doesn't reflect much improvement in the PC market, or potential for near-term growth"

A slight uptick in business volume contributed to shipments. The top three vendors (Lenovo, HP, and Dell), which all have an important presence in the enterprise and public sectors, each saw modest positive year-on-year growth during the quarter. Conversely, consumer sentiment remained lukewarm at best, as evidenced by the continued struggles of Acer and ASUS.

Despite some encouraging developments in the business space, emerging markets continued to exhibit troubling signs, with Asia/Pacific (excluding Japan)(APeJ) in particular still facing stock of Ivy Bridge-based systems and continued encroachment from lower-priced tablets and smartphones.

"The third quarter was pretty close to forecast, which unfortunately doesn't reflect much improvement in the PC market, or potential for near-term growth," said Loren Loverde, Vice President Worldwide PC Trackers. "Whether constrained by a weak economy or being selective in their tech investments, buyers continue to evaluate options and delay PC replacements. Despite being a little ahead of forecast, and the work that's being done on new designs and integration of features like touch, the third quarter results suggest that there's still a high probability that we will see another decline in worldwide shipments in 2014."

"The United States outperformed many other regions as growth stabilized just under 0%. Continuing upgrades from Windows XP boosted shipments, particularly in the commercial desktop segment, while retail acceptance of new and emerging product categories, such as Chromebooks and Ultraslims, helped the portables segment," said Rajani Singh, Senior Research Analyst, Personal Computers. "Nevertheless, the broad picture of the U.S. market has not changed much, with hopes for a small increase in the fourth quarter followed by a challenging 2014."

Regional Highlights

United States – The U.S. market continued to show signs of recovery although shipments were down slightly (-0.2%) year over year in the quarter. Better alignment with channel partners and internal restructuring helped most of the top vendors to grow faster than the market. Additionally, emerging product categories and a greater assortment of Windows 8-based models supported the volume uptick. Migration from Windows XP to Windows 7 added a few basis points as well. HP maintained its leadership position, gaining a few points of share in the U.S. Among the other top-tier leaders, Lenovo recorded impressive growth of 25.8% year on year and managed to maintain strong positive momentum by growing its channel reach and relationship sales.

EMEA – The PC market in Europe, Middle East, and Africa (EMEA) contracted in the third quarter in line with IDC forecasts. PC shipments remained constrained particularly in the home segment, which continued to suffer from weak consumer demand amid an ongoing budget shift to tablets. From a supply perspective, the quarter was also affected by an unfavorable year-on-year comparison with 3Q12, when shipments were supported by preparation to Windows 8 launch. Lean inventory remained a priority for channel partners across EMEA during 3Q13, inhibiting further sell-in. Portable PC shipments suffered a particularly strong decline, while desktops were less constrained. As forecast, the commercial market was less negative than the consumer market due to pockets of investments remaining available despite constrained spending. Shipments were also supported by seasonal back-to-school projects.

Japan – The PC market in Japan performed better than expected. Improved economic sentiments, favorable exchange rates, and the approaching expiration of Windows XP support helped to lift the market although consumer buying remained suppressed. Most of the top 5 vendors saw growth compared to the year before.

Asia/Pacific (excluding Japan) – APeJ was generally close to forecasts with a decline of -8.8% year on year. Many countries, particularly in developing markets, struggled with exchange rate pressures, but commercial buying in China was better than expected.

Vendor Highlights

Lenovo maintained the top PC vendor title, and continued to expand its channel reach as well as experiment with new form factors. Troubles in Asia/Pacific continued to pose a significant problem, where much of the lower-tier channels struggled with inventory clearance, constraining overall growth. However, the vendor posted a strong gain in the U.S. market, growing more than 2% compared to a year ago.

HP finished the quarter in the number 2 position, with growth improving from recent quarters. The company continued to receive a boost from shipments to India as part of a large education project. Shipment trends also improved in the U.S. and EMEA, but HP continued to face struggles in Latin America.

Dell saw its first positive year-on-year growth since the fourth quarter of 2011, thanks largely to maintaining growth in the Americas market. The company also managed to edge past 9.5 million units shipped in a quarter for the first time in over a year.

Acer Group continued to be affected by declines in shipments across all regions due to continued weakness in consumer PC spending. The firm nevertheless has remained aggressive in trying new form factors and hybrid devices.

ASUS shared a similar predicament with Acer where despite a focus on new designs, its lack of corporate customer base has also limited its growth.

Some IDC estimates prior to financial earnings reports.

Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold.

PCs include Desktops, Portables, Mini Notebooks, and Workstations and do not include handhelds, x86 Servers, and Tablets (i.e. iPad and Android-based Tablets with detachable keyboards). Data for all vendors are reported for calendar periods.

IDC's Worldwide Quarterly PC Tracker gathers PC market data in over 80 countries by vendor, form factor, brand, processor brand and speed, sales channel and user segment. The research includes historical and forecast trend analysis as well as price band and installed base data.