8 Takeaways From The Bleak Q2 PC Shipment Numbers8:52 PM EST Thu. Jul. 11, 2013
It's no shocker the PC market is struggling. Both research firms IDC and Gartner independently confirmed what most already suspected. On Wednesday they both released numbers that show a downturn in PC units shipped in the last three months, for the second quarter of 2013. IDC reported a worldwide downturn of 11.4 percent of PC units shipped compared to the same time last year. Gartner reported a 10.9 percent drop.
Another not-a-shocker data point to anyone paying attention to the PC space is both research firms blame the popularity of inexpensive tablets as deferring the purchase of new PCs. But, here's a closer look at Wednesday's PC numbers, exploring who some of the winners and losers were and whether it's fair to blame things such as Windows 8 (as many do) for a slumping PC market.
Clearly the big winner of Wednesday's two reports was Lenovo, which was crowned by both IDC and Gartner as the new worldwide leading PC seller, a title Hewlett-Packard held for the past seven years. Thanks in large part to its home-field advantage in China, PC market Lenovo was able edge out HP as the worldwide PC seller. According to Gartner, it's not the first time Lenovo has earned the title as the world's No. 1 PC seller. In October 2012, Lenovo was the top worldwide PC maker for the third quarter, according to Gartner. However, IDC reported that Lenovo earned the bragging rights for the first time this week.
Back in 2006, HP grabbed the top worldwide PC maker title from a then-struggling Dell and held onto it until Wednesday. At the time, Dell was the No. 1 PC maker for three years in a row, but it began to struggle and soon felt the effects of weak U.S. sales, was dogged by a federal investigation into its finances, and was reeling from a recall of 4.1 million Sony batteries from its laptops. Meanwhile, HP had just brought on CEO Mark Hurd, replacing Carly Fiorina. Under Hurd, HP was able to boost its laptop sales, giving it an edge over Dell, according to IDC sales numbers. For the next seven years, no company could unseat the mighty HP when it came to worldwide PC sales, according to IDC tracking numbers.
On Wednesday that all changed. HP ate a big slice of humble pie, releasing the statement: "We don't like being number two and we don't plan to stay there. We have a multi OS, multi architecture and multi form factor computing strategy that we believe will delight customers and rebuild share. We're also focused on building a profitable business that's smart about its future."
Despite the downward trend for the PC marketplace there were some positives. IDC pointed out that Dell saw quarter-to-quarter growth over the last year. That's welcome news to Dell, which has been distracted by uncertainty surrounding its restructuring. IDC chalked it up to a possible indication of "stronger performance in coming quarters and reflecting more commercial replacements as we get closer to the end of Windows XP support."
Gartner didn't so much give Dell a reason to cheer but perhaps a reason not to hang its head too low when it reported: "Dell's shipments declined compared to a year ago, but its 2Q13 results showed a smaller decline than the past several quarters."
Dell shipped 4.2 percent less PC this quarter compared to the same time last year, according to IDC. Gartner reported 3.9 percent drop in PC shipped for the same time period.
In terms of PCs shipped worldwide, Apple didn't make the top the five, according to IDC and Gartner. Domestically, Apple ranks No. 3 behind HP and Dell, according to IDC and Gartner. The most notable data point about Apple for the second quarter is that Apple's U.S. PC shipments declined faster than the overall market, Gartner reported.
Apple was down 4.3 percent from this time last year. That drop is worse than the U.S. average of 1.4 percent drop. It should be noted, Gartner counts Windows 8 tablets as a PC shipped, and it didn't count Apple iPads as a PC shipped. But it's not Apple's channel presence (or lack thereof) that's interesting. Instead, Apple's numbers reveal more about Windows system sales.
It's a common refrain by PC pundits that a dislike of Windows 8 is partly to blame for anemic PC sales. But, weak computer sales numbers from Apple suggest the softening of the PC market is not exclusive to Windows-based systems. Can't Windows 8 be blamed for something?
Microsoft and its Windows 8 operating system, it turns out, can't be the industry's punching bag for a bad quarter. More than a few have blamed Windows 8 for not lifting PC shipments. But, Gartner principal analyst Mikako Kitagawa reported Wednesday that Windows 8 bashers can't pin the bad news on Microsoft's latest OS.
"While Windows 8 has been blamed by some as the reason for the PC market's decline, we believe this is unfounded as it does not explain the sustained decline in PC shipments, nor does it explain Apple's market performance", says Gartner principal analyst Mikako Kitagawa.
So what is to blame?
There are a few theories on why PC sales have been slumping. Gartner's Kitagawa blames the obvious: low-priced tablets. "We are seeing the PC market reduction directly tied to the shrinking installed base of PCs, as inexpensive tablets displace the low-end machines used primarily for consumption in mature and developed markets," Kitagawa said. "In emerging markets, inexpensive tablets have become the first computing device for many people, who at best are deferring the purchase of a PC. This is also accounting for the collapse of the mini notebook market."
Gartner also cited Intel's launch of Haswell processors for hurting sales because it forced PC makers to cut shipments to make room for new systems running Intel's latest microprocessors. This is a theory IDC also bolstered: "Vendors and regions seemed to be focused on inventory reduction during the second quarter, which could reflect planned launches of new models as well as lower inventory going into the second half of the year."
Acer saw the biggest decline in its PC business with a 32.6 percent drop in systems shipped compared to the same time last year, IDC reported. Asus saw a 21.1 percent drop in units shipped in the same time period, and Dell came in with a 4.2 percent drop, according to IDC.
Gartner's numbers jived with IDC's numbers on Acer, which saw its shipments decline 38.5 percent year-on-year, according to both research firms. Gartner blamed Acer's poor performance on its portfolio shifting away from netbooks to Android tablets. Gartner also said netbooks were at the heart of a poor quarter for Asus. "Asus also experienced a PC shipment decline in the second quarter 2013. The drop of its netbooks continued to impact its overall notebook results," the research firm wrote.
IDC and Gartner's reports were sobering, but they did find a few bright spots. Gartner noted that in the U.S., HP, Dell, and Lenovo reported better-than-average U.S. growth rate for the recent quarters. "The end of Windows XP support potentially drove the remaining PC refresh in the U.S. professional market," Gartner wrote.
IDC was also bullish that the demise of XP support could drive future PC sales. "The U.S. market is beginning to reflect some of the Windows XP to Windows 7 transition we've been expecting," wrote said Bob O'Donnell, IDC's program vice president, clients and displays.
IDC also said a wider selection of Windows 8 models helped push higher PC volumes than originally anticipated. That could bode well for the Windows 8.1 release in August.