European PC market in freefall – double-digit decline across sector in Q3

8 Nov 2012

In what must be a bloodbath for tech retailers, PC shipments in Western Europe fell 15.4pc in the third quarter to 13.6m units shipped. Many vendors tried to clear old inventory ahead of the launch of Windows 8 and were overly cautious about stocking new inventory.

“We’ve witnessed a decline across all PC segments this quarter in Western Europe,” said Meike Escherich, principal analyst at Gartner.

In the third quarter of 2012, mobile PC shipments declined 15.2pc while desktop PC shipments decreased 15.7pc. The professional and consumer PC markets declined 15.8pc and 15pc, respectively. 

PC shipments in June and July were very low, as many vendors were trying to clear inventory from the second quarter of 2012. Channel and retail partners also remained cautious about stocking too much inventory ahead of the Windows 8 launch. 

HP continued to lose market share but retained the No 1 position in the overall and professional PC segments.

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“HP’s new leadership team has undertaken several initiatives to reignite its business, but transition periods are always difficult,” Escherich explained.

Acer maintained second place and is getting closer to HP — Acer was 5.2 percentage points behind HP in market share in the third quarter of 2012. Despite a double-digit volume decline, Acer retained the lead in the consumer PC market in Western Europe.

Asus remained in third place as its netbook volume declined further and ultrabook uptake remained slow. 

Lenovo had a second consecutive strong quarter and increased its share two percentage points in the Western European PC market.

Lenovo was also the only top 5 vendor to exhibit growth this quarter. In addition to vendor acquisitions, Lenovo has taken an aggressive position on pricing, especially in the professional PC market. This strategy had an impact on Dell’s performance this quarter — Dell dropped to fifth position. 

“The PC market will eventually return to growth, but the growth rate will not be at the level it was a few years ago. The real long-term challenges for the PC industry and PC vendors are to show growth and bring out products that can compete with the compelling new mobile devices coming onto the market,” Escherich said. 

‘The PC market has lost its luster’

PC shipments in the UK. totalled nearly 3m units in the third quarter of 2012, a decline of 7.2pc compared with the same period in 2011.

The UK PC market has seen a decline in PC shipments during seven of the last eight quarters.

In the third quarter of 2012, the consumer PC market declined 8pc, while the professional PC market declined 6pc. The mobile PC market decline was lower than expected this quarter – it decreased 3pc, while the desktop PC market fell 13pc.

“The PC market has not only lost its luster but is now on an ever-declining trend. The challenge to get users to buy the next generation of PCs with Windows 8 is huge,” said Ranjit Atwal, research director at Gartner.

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“There is no doubt that the recent launch of Windows 8 has had an impact on inventory levels,” Atwal added.

“However, the question is whether the vendors can position and price the products correctly during the next quarter.”

In the third quarter of 2012, Toshiba and Apple were the only top 5 vendors to achieve growth in the UK PC market. Although HP has been struggling, it increased its share.

However, Dell’s market share has been slipping fast. Dell’s market share more than halved since 2008 when its market share reached almost 25pc.

It will also be tough for Dell to compete in the consumer PC market moving forward as it looks for higher margin products.

Tech map of Europe image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years