PC sales fall off a cliff – steepest quarterly decline on record reported

11 Apr 2013

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The full extent of the decline of the PC industry has been made clear in the latest quarterly analysis from IDC, which revealed a near 14pc drop in the number of PCs sold in the first quarter of this year compared with last year.

During the first quarter, some 76.3m PCs were shipped, down 13.9pc on this time last year.

The decline in PC sales is being driven by the rise in demand for smartphones and tablet computers.

Weak reception for Windows 8 along with component supply problems for ultraslim systems have compounded the issue.

According to IDC, the PC industry is simply failing to inspire consumers to choose PCs over competing devices and there is a perception now that PCs are cumbersome and expensive compared with their lighter, easier to use and more affordable tablet cousins.

“At this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market,” said Bob O’Donnell, IDC program vice-president, Clients and Displays.

“While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the UI, 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,” O’Donnell said.

Restructuring efforts at HP – which nearly jettisoned its PC business a year ago – did not help matters, and IDC said the only PC manufacturer that seems to have gained momentum and that is still attacking the market with vigour is Chinese computer manufacturer Lenovo, which bought IBM’s PC unit in 2006.

The most vulnerable group in the market is the whitebox system builders.

“Although the reduction in shipments was not a surprise, the magnitude of the contraction is both surprising and worrisome," said David Daoud, IDC research director, Personal Computing.

“The industry is going through a critical crossroads, and strategic choices will have to be made as to how to compete with the proliferation of alternative devices and remain relevant to the consumer. Vendors will have to revisit their organisational structures and go-to market strategies, as well as their supply chain, distribution, and product portfolios in the face of shrinking demand and looming consolidation.”

PCs: the global picture

IDC

Across the world, PC sales were down significantly. In the US, IDC reported a “dismal quarter”, with PC sales down 12.7pc. Economic problems in Europe also led to double-digit declines and a lukewarm reception for Windows 8 in China also led to a double-digit decline in Asia-Pacific. Economic improvements in Japan and scheduled commercial replacement of Windows XP also failed to offset weak demand for PCs.

In terms of manufacturers, HP’s worldwide shipments fell 23pc year on year while Dell fell 10pc globally and 14pc in the US.

Globally, Lenovo’s sales were flat but it managed to achieve double-digit growth in the US.

Apple fared better than the overall US market but saw shipments decline as its own desktop and notebook computers face competition from iPads.

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com