The worldwide PC market saw growth stall in the second quarter of 2012 (2Q12), with shipments falling 0,1% from a year ago.
This is according to research from both IDC and Gartner, with Gartner placing the total shipments at 87,5-million units.
“In the second quarter of 2012, the PC market suffered through its seventh consecutive quarter of flat to single-digit growth,” says Mikako Kitagawa, principal analyst at Gartner. “Uncertainties in the economy in various regions, as well as consumer’s low interest in PC purchases, were some of the key influencers of slow PC shipment growth. Despite the high expectations for the thin and light notebook segment, Ultrabooks, shipment volume was small and little impact on overall shipment growth.
“Consumers are less interested in spending on PCs as there are other technology product and services, such as the latest smartphones and media tablets that they are purchasing. This is more of a trend in the mature market as PCs are highly saturated in these markets,” says Kitagawa.
“A big portion of R&D spending has been allocated to Ultrabook development, together with Intel’s massive investments to establish the market segment. Though Ultrabook was at first introduced in the market in 2011, the major promotion kicked off toward the end of 2Q12 with the IvyBridge, based Ultrabook release. This segment is still in an early adopter’s stage.”
IDC attributes slow second quarter sales at least partly to disappointing sell-out of distribution channels during the first quarter. This limited demand from channels that are wary of building inventory ahead of new product launches this fall. Moreover, consumers remained reluctant about purchasing PCs in this environment of tech transition and soft economics. Ultrabooks have not yet produced a significant rise in volumes – in part due to anticipation of improvements such as Windows 8, which is expected later this year, but also due to pricing. Constrained demand in Europe and the US has also been felt in emerging markets for some time, but the second quarter brought another milestone of sorts as Asia/Pacific (excluding Japan) showed flat year-on-year growth; its worst performance in years.
“These latest results validate IDC’s expectation that the second quarter would be a transition period where both economic factors and anticipation for new products in the second half of the year would result in relatively low PC shipment growth,” says Jay Chou, senior research analyst, worldwide PC tracker at IDC. “The announcement of a Windows 8 launch date, as well as broader communication of new features in the OS, are key steps that would help to address uncertainty about new product availability and help consumers and channels plan their purchases.”
“The US market suffered a double-digit contraction in the second quarter as market saturation and economic factors combine with anticipation of Windows 8 and other changes later in the year. In this context, consumers are delaying purchases, and vendors and retailers are slowing down their PC activities to clear existing inventories. The situation is exacerbated by consumer notebook saturation, a slowing replacement cycle in the commercial sector, and the big macro-economic and political events affecting confidence and spending,” says David Daoud, research director, personal computing at IDC. “We don’t expect PCs using Windows 8 to boost growth significantly until the fourth quarter, which leads to a conservative outlook for the third quarter.”
According to Gartner, HP continued to be in the top position in worldwide PC shipments. It accounted for 14,9% of the market, but its global shipments declined 12,1%. Some of HP’s disappointing results were due to internal issues from the organisational changes. HP’s PC business has not been back to pre-restructuring level yet. The company also faced aggressive pricing from Lenovo in the professional market, and threats from companies such as ASUS and Samsung in the already crowded consumer markets.
Lenovo’ s shipment growth continued to exceed the worldwide average, significantly narrowing the market share gap with HP. Lenovo has been very aggressive to expand through a series of acquisitions, as well as aggressive pricing. Lenovo’s aggressive expansion damaged its competitor’s performance, namely HP and Dell, by taking shares from them. Lenovo showed significant growth in EMEA though there is growing concern of the inventory build toward the second half of 2012.
Acer managed to increase shipments compared to a year ago, and the company was able to clear its inventory issues, and prepare for the growth. Acer has been one of the first vendors to release ultrabooks, and it will most likely lower the ultrabook price faster than other vendors. Acer has been also very actively promoting its media tablet products.
Dell has been in a process of transforming itself from a PC supplier to solution provider for professional markets. Although Dell’s focus was not to pursue the market share gain, Dell needs to maintain certain level of market share. Dell showed year on year shipment decline across all regions, but EMEA and Asia/Pacific were particularly challenging markets.
Asus showed the strongest growth among the top five vendors worldwide, as its shipments increased 38.6 percent in the second quarter of 2012. Asus’s strong growth came from EMEA and US markets. Asus did well at diversifying the product portfolio: starting with mini-notebook expansion, then quickly moving to the mid- to high-end notebook market.
In the US, Gartner says PC shipments totalled 15,9-million units in the second quarter of 2012, a 5,7% decline from the same period last year. The slowdown in the US market was largely attributed to weak consumer spending on PCs. This reflects a combination of consumers’ reduced interest in PCs, and vendors reduced willingness to sell PCs due to other products and services that consumers are interested. The major promotion of ultrabooks could potentially change the market dynamics.
“Weakness in the US public market affected the professional segment despite the high PC procurement season in the second quarter,” says Kitagawa. “Both government and education institutions are encountering tight budget situations. Shipments to the public sector are expected to be lower than normal seasonality.”
HP continued to lead the US PC market, as it accounted for 25% of PC shipments in the second quarter of 2012. Among the top five vendors in the US PC market, all but Apple experienced a decline in shipments.
From a regional perspective, EMEA, Asia/Pacific and Japan registered low single digit-growth while all Americas markets posted year-over-year shipment declines.
PC shipments in EMEA totaled 25,1-million units in the second quarter of 2012, a 1,9% increase from the same period last year. Western Europe saw very weak demand across all countries but especially Southern Europe. Consumer willingness to spend on PCs was furthered hindered by the growing eurozone economic crisis. Retailers again took a risk adverse approach but distributors may well have greater levels of inventory. This will hinder future growth of markets as Windows 8 and more ultramobile notebooks arrive in the second half of 2012.
The Asia/Pacific PC market grew 2%, as shipments reached 31,8-million units. The weak US and European economic situation, coupled with the slowing economy in China, affected the region’s market sentiments where people reacted by scaling back on spending due to the uncertainties. There was the tightening of budgets in the professional segment, as well as a lack in new government initiatives to stimulate IT purchasing activities. Consumers either spent on alternative devices or remained cautious on discretionary spending.
In Latin America, PC shipments in the second quarter of 2012 totalled 9,3-million units, a decline of 1,7% from the second quarter of last year. PC shipments in Japan grew 2% in the second quarter of 2012, as shipments surpassed 3,9-million units.