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Between clearing out inventory and the growing shift to portable devices, the global PC market is in desperate need of a reboot. New reports by research firms indicate that global PC shipments are set to decline for the first time in 11 years.
Gartner, a leading information technology research company, announced late Wednesday that worldwide PC shipments totaled 87.5 million units in the third quarter, representing an 8.3 percent decline from a year earlier. The results are preliminary, but IDC, another research firm, also shows that shipments fell more than 8 percent in the most recent three month period. It is the largest projected drop for the industry since at least 2001. A third report from IHS also sees total PC shipments contracting.
Microsoft (NASDAQ:MSFT) is set to release its new Windows 8 operating system later this month, and is cited as affecting sales. “A continuing slowdown in consumer PC shipments played a big part in the overall PC market decline,” explains Mikako Kitagawa, principal analyst at Gartner, in a press release. “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.”
Over the past decade, the PC industry enjoyed double digit growth in most years, but more desirable portable products such as the Apple (NASDAQ:AAPL) iPad have given way to a thriving tablet market. The iPad continues to sell like hot cakes, and other companies such as Amazon.com (NASDAQ:AMZN), Google (NASDAQ:GOOG) and Samsung continue to offer tablet products each year.
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In the worldwide market, there was a shake up for the top spot among PC vendors. China’s Lenovo took the number one position in global PC shipments for the first time in the company’s history. It shipped an estimated 13.77 million units, growing its market share to 15.7 percent. In comparison, Lenovo shipped 12.54 million units in the same period last year. The company has been making a bigger push into the market, starting with purchasing International Business Machines’ (NYSE:IBM) PC business seven years ago.
For the first time since the third quarter of 2006, Hewlett-Packard (NYSE:HPQ) slipped to the number two spot, shipping an estimated 13.55 million units, a 16.4 percent decline from a year earlier, according to Gartner. The estimate places HP’s market share at 15.5 percent, slightly behind Lenovo, but still ahead of Dell (NASDAQ:DELL). Acer Group and ASUS round out the top five PC vendors worldwide. HP has been struggling all year, and the only bright side appears to be that IDC still places the company’s market share at the top of the list by a small margin.
Gartner’s data is listed below:
Although Windows 8 is expected to reboot the PC industry, Gartner warns that it might take some time. Consumers did not flock to PC units during the back-to-school season as expected, and the professional market will not adopt Windows 8 PCs immediately after the release.
“The third quarter has historically been driven by back-to-school sales, but U.S. PC shipments did not increase, not even sequentially, from the second quarter of 2012. Channels were conservative in placing orders,” Ms. Kitagawa explains. “Professional PC shipments in the U.S. began slowing in the second quarter of this year, and they continued the trend in the third quarter. The results indicate that the replacement peak may have passed in the professional sector.”
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