Struggling PC makers and Windows 8 push PC market into free fall
By Agam Shah
A “perfect storm” of struggling PC companies, aversion to Windows 8 and wider mobile-device adoption plunged the already struggling PC market into a free fall during the first quarter this year, IDC said.
Worldwide PC shipments in the first quarter totaled 76.3 million units, down 13.9 percent compared to the same quarter last year, IDC said in research released on Wednesday. The decline was worse than 7.7 percent previously forecast by the analyst firm.
PC shipments fell across all regions worldwide, and the market is headed into a further contraction than previously expected, IDC said in a statement.
The industry is at a crossroads where the future of PCs is being questioned as users move to alternative computing devices such as tablets and smartphones, said David Daoud, research director at IDC.
Instability among PC makers, higher prices and supply chain issues contributed to the poor PC market performance in the first quarter, Daoud said.
Dell is on the sales block, which may keep PC buyers away from the company, while the world’s top PC maker, Hewlett-Packard, is still in the early stages of a long restructuring process, Daoud said. Innovation has come to a standstill, and PC makers are having trouble acquiring components like touchscreens that would otherwise help draw buyers to laptops and desktops.
Windows 8 has not been successful among mobile or desktop users, who have struggled adapting to its touch-based user interface, Daoud said, adding that users are also missing the Start button. Microsoft has to take quick corrective action to help the PC market, he said.
Even if users wanted to take advantage of Windows 8, touch PCs are expensive, Daoud said. A majority of PCs sold during the quarter were non-touch, and prices of touch PCs will fall when supply of components normalizes, which could boost the adoption of Windows 8.
Intel has been pushing a new category of thin and light laptops called ultrabooks, some of which have touchscreens and detachable displays. Ultrabooks have so far sold poorly because of high prices, but PC makers are increasing the number of touch models available as part of their ultrabook lineups.
As in previous quarters, poor netbook shipments were partly responsible for a slowdown in PC shipments. Many users of the traditional netbooks—called mini-laptops by IDC—have moved on to tablets, Daoud said.
PC shipments even slowed down for the companies that recorded growth in the previous quarter. Lenovo, the world’s second largest PC maker, gained market share and closed in on HP, but global shipments were flat compared to the previous year. Lenovo has had the traditional advantage of strong shipments in the China market, which weakened during the first quarter. The company however gained share in the U.S. market, with “double-digit” percentage growth in PC shipments, according to IDC.
HP shipped around 12 million PCs during the quarter, dropping by 23.7 percent, but retaining a 15.7 percent market share. Lenovo had a 15.3 percent market share, with shipments of 11.7 million units. In third place was Dell, which shipped 9 million units, a drop of 10.9 percent, retaining a market share of 11.8 percent. Fourth-place Acer suffered the most, with shipments declining by 31.3 percent to 6.15 million units. Asustek, in fifth place, shipped 4.36 million units, a drop of 19.2 percent.
Looking forward, the PC market is expected to continue regressing. PC shipments totaled 341 million last year, but will fall to 315 million in 2013, and to 302 million in 2014, research firm Gartner said earlier this month.
The fall in PC shipments may be reflected in the upcoming quarterly earnings reports of Intel and Advanced Micro Devices, which are the primary supplier of chips for desktops and laptops.
Note: When you purchase something after clicking links in our articles, we may earn a small commission. Read ouraffiliate link policyfor more details.