Global PC Sales Drop 11% YoY in Q1

Relatively higher price of Windows 8 stops it from being growth driver

Recent reports that the global PC market is on an inevitable slide with ever increasing use of PDAs as tablets, smartphones seem to be coming true. The launch of Windows 8 seems powerless to revive the gloomy global market for PCs that has been shadowed by the rise of tablet PCs over the past few years, as global PC sales in the first quarter this year dropped 14% yearly to only around 76.3 million units, a single-quarter low since the second quarter of 2009, according to the latest report by International Data Corp. (IDC), a global market researcher.

IDC says that global PC sales have declined for four consecutive quarters, with the drop in the first quarter of the year even more drastic than its forecast of 7.7%, also being the steepest in the past two decade.

Meanwhile, another British researcher, Gartner Inc., also issued a report saying that global PC sales plummeted 11% in the quarter from to a year ago.

Gartner says that consumers ever more opt for, instead of traditional PCs, mobile Internet devices as tablet PCs and smartphones, hence leading to the declining global PC sales. Also notable is that, says Gartner, sales in the EMEA (Europe, Middle East and Africa) market showed the largest decline among global regional markets.

Windows 8 Hype Disproven

The long-awaited Windows 8, Microsoft's newest PC operating system that enables touch operation of conventional PCs, was widely regarded by PC vendors to be able to slow the encroachment by mobile devices upon its launch in the fourth quarter of 2012, which seems now mostly hype and wishful thinking.

IDC says that Windows 8 is failing to drive PC growth due to relatively higher price, for most consumers refuse to pay more for PCs with touchscreens coupled with the new operating system, choosing instead more affordable tablets and smartphones that are functionally similar with Windows 8-powered PCs.

Casualties

The world's top-five PC brands as HP, Lenovo, Dell, Acer and Asus have all suffered shrinking market shares in the first quarter of this year.

According to Gartner, HP remained the world's largest PC brand in the quarter, but with market share plummeting 23% to only 14.8%, leading only 0.1 percentage point over the 14.7% of the runner-up Lenovo, which posted 0.1% growth in market share as an exception among the biggest five brands. While reporting the largest drop in market share since acquiring Compaq in 2003, HP has also witnessed sales of commercial PCs, its major profit-maker, eroded by competitors.

Although seemingly in comparatively good shape and effectively narrowing its gap ahead of HP, Lenovo finished the first quarter of this year with its worst sales since the first quarter of 2009, due mainly to significant decline in sales in the Asia Pacific, where the China-based brand generates over half its sales, according to Gartner.

Dell witnessed sales generally drop at home and in overseas markets excluding Japan, according to Gartner, which attributes the brand's sales growth in Japan primarily to robust demand from enterprises for PC replacements. Dell's future may be even more woeful in the short term, as the brand has been reportedly planning to go private via a US$2.4 billion repurchase of floated stocks, which fuels competitors' ambition to take over the segment left by the American brand.

Meanwhile Acer and Asus also saw their market shares shrink by 29.3% and 3.5% YoY, respectively, to 8.6% and 6.8% in the first quarte, according to Gartner, which also notes that Acer suffered the deepest drop in market share among the top-five brands.

Regardless of its occasional insurmountable reign in the smartphone and tablet PC segments, Apple also couldn't evade the global PC industry's decline, with IDC indicating the brand's PC sales in the U.S. had dived 7.5% in the first quarter of this year, trailing HP and Dell in market shares.

Institutional investors like Barclays Capital Securities pessimistically forecasts the global PC market to further darken in the second quarter compared to the first quarter for a variety of reasons, including product mix adjustments by major vendors and inventory adjustments by distributors.

Gartner's Market Share Survey of Top-Five PC Brands in Q1, 2013
Brand	Market Share	Growth Rate
HP	14.8%	-23.0%
Lenovo	14.7%	0.1%
Dell	11.0%	-11.2%
Acer	8.6%	-29.3%
Asus	6.8%	-3.5%

 

IDC's Market Share Survey of Top-Five PC Brands in Q1, 2013
Brand	Market Share	Growth Rate
HP	15.7%	-23.7%
Lenovo	15.3%	0.0%
Dell	11.8%	-10.9%
Acer	8.1%	-31.3%
Asus	5.7%	-19.2%