IDC analysts earlier this year had predicted that PC shipments in the second quarter would fall another 7.1 percent, continuing a trend going on three years of contraction in the worldwide PC market as consumers and business users turned to tablets and smartphones for more of their computing needs.
However, in a report this week, IDC found that the second-quarter decline was only 1.7 percent—the smallest fall in two years—with analysts seeing strengthening in both the commercial and consumer segments. Businesses are continuing to refresh their systems, while consumers, after several years of buying tablets, seem to be showing new interest in lower-cost PCs, the analysts said.
"The better-than-expected results seem to arise from two places," Jay Chou, senior research analyst for IDC's Worldwide PC Trackers, said in a statement when the firm's numbers were released July 9. "One encouraging factor was a good intake of lower-end systems, including Chromebooks, which coincides with the recent slowing in tablet growth and perhaps signals the beginning of some stabilization on the consumer side. In addition, a sizable number of PCs are still running Windows XP and the impetus to upgrade them continued to boost shipments in the second quarter."
IDC's report was one of several this week that indicate a slight shift in what consumers and businesses are looking for, with the PC numbers stabilizing—and returning to growth in 2015, according to Gartner analysts—and the demand for tablets slowing a bit for a number of reasons. That is good news for a range of system vendors and component makers, which have seen their financial numbers take a hit over the past few years, and backs up what some company executives said they saw in the first quarter.
Gartner analysts on June 9 also reported improvement in PC shipments in the second quarter, with stabilization coming in developed regions, though those numbers were offset by declines in emerging markets. According to the firm's numbers, 75.8 million PCs shipped during the three months, a 0.1 percent increase over the same period in 2013.
Those numbers come as sales of premium tablets slow, with the devices having penetrated a significant number of households, according to Mikako Kitagawa, principal analyst at Gartner. Consumer interest is returning to PCs, while Microsoft's decision to end support of the aged Windows XP operating system in April is only telling a part of the story on the commercial side, he said.
"PCs are now growing off a smaller installed base of newer devices, with more engaged users," Kitagawa said in a statement. "Therefore, we expect to see slow, but consistent, PC growth. While the end of support for Windows XP drove some of the sales in developed markets, it is the underlying business replacement cycle that will stabilize the market."
The worldwide decline in PC sales has had its impact on the industry. OEMs from Hewlett-Packard to Dell to Acer and component makers like Intel and Advanced Micro Devices aggressively expanded their efforts in growth markets—including mobile devices and enterprise IT solutions—hoping to offset the revenue losses they were taking in their PC-related businesses.
After three years, some company executives reported seeing some stabilization come to the PC market in the first quarter. Intel CEO Brian Krzanich said in April that a combination of factors—from the Windows XP migration and an aging PC installed base to falling prices and new PC form factors—helped bolster its PC business, which saw revenues in the first quarter fall only 1 percent.
"So it's a combination of factors that's really driving the stabilization" of the PC market, said Krzanich, whose company still gets more than half of its revenue from PC chip sales.