Worldwide PC shipments totalled 62,4-million units in the second quarter of 2016 (2Q16), a year-on-year decline of 4,5%, beating the forecast of -7,4% by roughly 3%, according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker.
The US market performed best, reflecting the strength of the US dollar and relative market stability.
Improvement in channel inventories appears to have contributed to the stronger results, along with an easier year-on-year comparison and easing of component supply. Unfortunately, these types of supply-side drivers don’t necessarily reflect a change in consumer purchases. Even PC channels remain fairly cautious following challenges over the past year, so the results are not likely to raise the forecast.
Nevertheless, improved inventory levels put the market on a better footing for the second half of the year, and the expiration of free Windows 10 upgrades may transition some users into buying new systems rather than updating older ones. Commercial evaluations of Windows 10 remain healthy and a near-term driver that could also be contributing to the relative strength in US shipments.
“The PC market continues to struggle as we wait for replacements to accelerate, along with some return of spending from phones, tablets, and other IT,” says Loren Loverde, vice-president: Worldwide PC Trackers and Forecasting at IDC. “Our long-term outlook remains cautions.
“However, the strong results in the U.S. offer a glimpse of what the market could look like with pockets of growth and a stronger overall environment. It’s not dramatic growth, but it could push the market into positive territory slightly ahead of our forecast for 2018.”
“As expected, the start of the peak education buying season helped generate large Chromebook shipment volumes in the US,” states Linn Huang, research director: Devices and Displays at IDC. “A somewhat unexpected boost came from intensified inventory pull-in as cautious channel players, who had been working to pare down inventory over the last several quarters, opened up inventory constraints a bit.
“This was likely a one-time shipment boost to bring aggregate inventory levels back to market equilibrium. The larger story remains whether an early wave of enterprise transition to Windows 10 could help close out a 2016 that is increasingly looking stronger in the US.”
In Europe, market sentiment remained muted. “Even the best case scenario calls for PCs to face significant challenges, with a somewhat fragile stabilization in the long run. The preliminary results did not capture the potential repercussions from the Brexit vote, which is expected to affect the timing and scope of spending plans in Europe,” says Jay Chou, research manager at IDC Worldwide PC Tracker, “IDC continues to monitor the evolving situation closely. The better than expected 2Q16 results should not be interpreted as a harbinger of significant improvements for PCs.”
In the EMEA region results are expected to be in line with forecast. Mobility needs continued to push interest towards notebooks, which supported overall volumes. This is the first recent quarter of comparison that was not impacted by Bing promotions (that inflated shipments through Q1 2015).
As a result, 2Q16 shipments represent a more normalized growth trend – still confirming long-term market erosion for traditional PCs, but showing hints of short-term stabilization. Currency fluctuations in the EMEA region, localised political developments in Western Europe, and ongoing instabilities in the Middle East are also constraining shipment growth.
Lenovo remained the worldwide PC market leader, and continued its strong growth in the US market. However, shipments in other markets continued to decline, pulling down overall growth. Lenovo’s lead in the share of total PC shipments shrunk over the past year from 1,8% a year ago to 0,4% this quarter. Nevertheless, the margin of leadership has fluctuated since Lenovo took the lead in 2013. Q2 2015 marked the largest lead Lenovo has ever held, and the company boosted its overall share to a peak of 21,7% in Q4 2015.
HP Inc had a solid quarter, with growth returning to positive territory after a year of declines. The US led regional growth with a gain of 11,5% from last year as the company rebounded from a couple of soft quarters, but other regions also saw growth in positive territory.
Dell also had a productive quarter, with worldwide growth recovering to over 4%. Dell managed a strong recovery in Japan, while also driving solid growth in the United States, although EMEA continued to drag on overall results.
Asus also saw growth recover in 2Q16, benefitting from an easier year-on-year comparison. The vendor pulled just ahead of Apple for the number 4 spot in overall PC shipments.
Apple continues to face an increasingly competitive market as it awaits a refresh of its PC lineup. As a result, shipments experienced a decline from last year.
