PC shipments in Europe, the Middle East and Africa (EMEA) reached 20,2-million units in the first quarter of 2015 – a 7,7% decrease year-on-year, according to International Data Corporation (IDC).
After a strong 2014, the market returned to a decline as expected, with business renewals decelerating after last year’s uplift prompted by the end of Windows XP support.
Macro-economic improvements in Europe were dampened by currency fluctuations and political tensions in Central and Eastern Europe, Middle East and Africa (CEMA). The strong dollar led to various price increases in local currencies.
Overall, portable PCs performed better than desktop thanks to final shipments of the 15-inch portables with Bing in Western Europe (WE) and some parts of the Central and Eastern Europe (CEE). The portable PC declined by 3,6% and desktop PCs by 14%. Resulting inventories across the different channels appear high but represent a limited reason for concern as the product values are low and most products were purchased while dollar rates were favourable.
On the other hand, the deceleration in the commercial market reflects the end of renewal waves of 2014, when growth was driven from one side by the end of Windows XP support in 1H2014 and from the other by a refresh cycle of old installed base in 2H2014.
Consequently, all three sub-regions posted a decline but Western Europe (WE) only contracted by 2% while Central and Eastern Europe (CEE) declined by 23% and Middle East and Africa (MEA) by 10%. Market consolidation also seems to be progressing further, with the top two vendors gaining significant market shares and continuing their battle for leadership in the region.
“The first quarter of 2015 was a transition period after strong renewals in 2014. While there are some expectations around the new CPU platform and operating systems to revive the market in coming quarters, the strong dollar will negatively impact IT budgets as product prices in local currencies have and will increase further,” says Chrystelle Labesque, associate director of DC EMEA Personal Computing. “Consumers and IT managers will have to decide if they postpone purchases or make compromises on their choice or amend their budgets.”
The PC market in Western Europe posted a 2% decline in shipments, with a contraction in the commercial market weighing on the overall result. The shipments were affected by exchange rate fluctuations which contributed to increases in components and prices of PCs and resulted in a drop in enterprise demand. The commercial market also suffered from unfavourable year-over-year comparison against 1Q14, when the end of Windows XP support boosted renewals, particularly in the desktop space. As a result, commercial PC shipments in Western Europe posted a 9.5% decline this quarter, with desktop dropping by 17,2%. Southern Europe was the exception, as Greece,
Italy, Portugal and Spain all continued to benefit from economic recovery and saw strong increases in commercial PC shipments.
The biggest Western European economies, however, witnessed a contraction, with many corporate renewals completed in the past year. The U.K. and Germany both posted double digit declines, while France was flat. On the other hand, consumer shipments in Western Europe held better than expected as vendors continued to stock up on attractively priced Bing notebooks, pushing substantial sell-in quantities into the market in January, before change to promotion conditions came in to place in February. This led to 8,4% growth in consumer portable PC shipments across Western Europe.
“We anticipated much weaker results in the consumer market in Western Europe this quarter. It seems, however, that vendors continued to ship Bing products in order to secure attractively priced inventory and maximize sales. As a result, January shipments came in very strongly and positively influenced the quarterly results,” says Maciek Gornicki, research manager at IDC EMEA Personal Computing. “Unfavourable exchange rates as well as changes to the Bing promotion will most likely lead to drop in shipments in the coming quarters, however, particularly in the consumer space, as vendors are expected to focus on depleting the 4Q and 1Q inventory and limit new shipments. The commercial market is also likely to remain negative, with many renewals completed in the past five quarters.”
“In line with the latest forecast the CEMA region, Central Eastern Europe and Middle East and Africa, reported a year on year contraction of 16%. The CEE region posted a PC market decline of 23% compared to the MEA region reporting a contraction of 10% year on year,” says Stefania Lorenz, associate vie=president of IDC CEMA. “The PC market in the CEE region remains affected by the devaluation of the local currency, slowdown in the economy, high inventory recorded in some countries and the ongoing turmoil in the Eastern part of the region all affecting negatively IT spending both in the consumer and the commercial space.”
“Within the CEE region, the Czech Republic, Slovakia, Romania and Hungary reported strong double digit growth thanks to the last sales-in push of Bing PCs to the channel,” says Nikolina Jurisic, product manager of IDC CEMA.
“The overall PC market in the MEA region reported an annual decline of 10%. The weak currencies in countries such as Nigeria, Egypt and Turkey, among others across the region, low oil prices, and political tensions present in certain parts of the region have badly affected consumer spending.”
The top two players seem to benefit most from market consolidation in EMEA, posting growth while the market is contracting.
HP continued to outperform the market and made this quarter again strong gains in the portable PC area. Results in WE and MEA were strong. The vendor focus on product innovations and Go-to-Market execution are key elements of the success.
Lenovo posted the strongest growth among the top players, continuously beating market expectations across EMEA. For the first time, the vendor reached more than 20% market share fuelled by strong momentum in Southern Europe (France, Italy, Spain, Greece, and Portugal).
Dell maintained third position in EMEA. While the vendor was in line with the commercial desktop market, its portable PC shipments suffered a stronger decline than average. However, Dell regained shares sequentially (4Q14).
Acer kept fourth position thanks to better than market results in the desktop PC area. The vendor suffered from the situation in CEE, especially in Russia, but managed to successfully gain shares in that country despite the currency challenge.
ASUS results were slightly below market, with desktop PC contracting after some quarters of strong growth.