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    Home Latest News
    • PC Hardware

    PC Shipment Declines Slow as Signs Point to Potential Turnaround

    By
    Jeff Burt
    -
    July 12, 2016
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      The global PC market continued its decline in the most recent quarter, but it was slower than expected and, if a few things break the right way, there could be improvement in the coming quarters, according to analysts with IDC and Gartner.

      IDC said second-quarter PC shipments fell 4.5 percent over the same period in 2015, while Gartner pegged the decline at 5.2 percent—the seventh consecutive quarter of negative shipment numbers. However, IDC had forecasted the drop in shipments at 7.4 percent, so the numbers were not as bad as expected.

      However, those numbers brought into focus the challenges and promise within the market, which has been battered since late 2011 by the popularity of smartphones and—for a little while—tablets, the lack of compelling new form factors to entice consumers and business users into buying new systems and the trend toward longer life cycles for PCs.

      According to IDC analysts, improved inventory levels in the channel, weak numbers in previous quarters—which made for easier comparisons—and the easing of component supplies helped drive the better results. However, while those factors improved the numbers, they didn’t necessarily mean that consumers were buying more PCs.

      But things could improve in the second half of the year, the analysts said. A key will be the expiration of free Windows 10 upgrades from Microsoft. When the software vendor released the operating system last year, the hope was the Windows 10, combined with systems featuring Intel’s latest processors, couldhelp drive sales of new PCs. However, Microsoft allowed users who had systems running Windows 7 and 8 to upgrade to 10 for free, encouraging them to keep their older systems. That free upgrade is expiring, which could convince people to buy new PCs and ditch their older ones.

      Loren Loverde, vice president of IDC’s Worldwide PC Trackers and Forecasting, said in a statement that the firm’s forecast is cautious, but strong numbers in the U.S. market—about 5 percent growth—”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.

      “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,” Loverde said.

      Gartner analysts also noted that other regions—such as Latin America and Europe—saw their numbers hurt by their weak currency against the U.S. dollar, though the better-than-expected second-quarter numbers could mean that the impact of the currency issues could be easing.

      Another issue that could have an impact is England’s Brexit vote to leave the European Union. It didn’t significantly affect the second-quarter PC numbers, but it could create uncertainty in the future in the economy, in Europe and beyond, Gartner analysts said.

      There are a lot of uncertainties, according to Principal Analyst Mikako Kitagawa.

      “While vendors and channels generally have more optimistic expectations of PC sales compared with the past, there is still a chance to have a potential inventory built,” Kitagawa said in a statement. “This will depend on how PC market demand picks up in the second half of this year for both the business and consumer segments.”

      Windows 10 refreshes by businesses could help boost PC shipments toward the end of this year and into 2017, she said.

      “The second and third quarter are typically PC buying season for the U.S. public sectors,” Kitagawa said. “Positive second-quarter results could suggest healthy PC sales activities among the public sectors.”

      Lenovo continued to lead the market, according to both IDC and Gartner. However, the company saw slight declines in shipments, while the next OEMs on the list—HP Inc., Dell and Asus—had small increases. Meanwhile, Apple saw declines of between 4.9 percent (Gartner) and 8.3 percent (IDC).

      Lenovo last week made a move to bolster its PC business by spending $195 million to buy the bulk of NEC’s stake in a joint venture in Japan. The two companies five years ago launched the joint venture, which became the top PC vendor in Japan. In the latest move, Lenovo acquired about 44 percent of NEC’s share, bringing its stake to 95 percent and leaving NEC with 5 percent.

      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.

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