Mobile Continues Crushing Flailing PC Industry; Worst Sales Drop in History Recorded

[dgstorm]

Industry analysts have been continuously sounding the "death knell" of the PC industry for quite some time now. Although it is probably exaggerated, today's newest market numbers (from two different studies) paint a stark picture revealing why people are making these predictions. The first quarter of this year saw the worst PC sales decline in history, as PC sales dipped down a whopping -14% (as you can see in the chart above). Here's a quote with more of the details,

Worldwide PC shipments have been, according to the IDC Worldwide Quarterly PC Tracker, at 76.3 million units, a decrease of 13.9 percent compared to the same time last year, and worse than the predicted forecast (which was at 7.7 percent).

Gartner preliminary results (final data should be available soon) say that 79.2 million units have been shipped, mentioning an 11.2 percent decline compared to the same time last year.

In terms of manufacturers leading in terms of PC shipments worldwide, both studies tend to agree – HP is still leading the market, with 15.7 percent market share in the IDC data, down from 17.7 percent for the same time last year (14.8 percent, down from 17.2 percent, in Gartner data). HP has shipped 11.9 million units (down from 15.7 million in last year’s first quarter) – 11.6 million, a drop from 15.3 million in Gartner data.

Lenovo, on the other hand, has experienced growth in terms of market share, and is in second position, very close to HP, with a market share of 15.3 percent, up from 13.2 percent, in IDC data, and 14.7 percent, up from 13.1 in Gartner data. In terms of shipments, Lenovo has sent out 11.700.000 units, as compared to 11.705.000 in last year’s first quarter, according to IDC, and 11.666.000 units in this year’s first quarter, versus 11.652.000 in last year’s first quarter (Gartner data).

Dell was third, with a market share of 11.8 percent, down from 11.4 percent (last year’s first quarter, according to IDC); Gartner data says Dell has maintained an 11 percent market share, the same as the one in last year’s first quarter. Dell has shipped, according to IDC, 9.01 million units, compared to 10.1 in last year’s first quarter, and 8.7 million units versus 9.8 during last year’s first quarter, according to Gartner’s preliminary data.

Acer Group and ASUS are in fourth and fifth position in both studies. The IDC graph below shows year on year growth rates up to this quarter.

Both studies include desktop and mobile PCs, as well as mini-notebooks, but not tablets. An interesting observation is that the professional PC area has actually grown, the reason being equipment refreshing, according to Mikako Kitagawa, principal analyst at Gartner.

With these bleak numbers it's almost surprising to see that Lenovo is still doing pretty well, although it's obvious it is at the expense of everyone else.

[Editorial aside: Despite these depressing sales figures, I suspect we will eventually see a leveling out of this trend. Eventually sales of tablets and smartphones will reach a saturation point, which is where PC sales are right now. Most of the people who will own one of these devices will already have one, and will only upgrade occasionally. We will basically see the smartphone industry and the tablet industry level off to a regular sales pattern, just like we are currently seeing in the PC industry. Right now, smartphones and tablets are the cool new trendy gadget; however, once everyone owns one, they will have no need to constantly buy new ones. The PC industry will not die off, but will instead become like the appliance industry and have regular "needs based" sales volume. Ultimately, when the next "new" disruptive tech comes along, the same thing will likely happen to smartphones and tablets. Of course, that's just my theory. Please share yours.]

 

[J515OP]

I agree with your input. It is interesting to see the loss but there are still millions of PC being shipped so it isn't like next year there will suddenly be no new PCs sold. Part of the problem is HP and Dell. Just look at the PCs they make, nobody is really very excited about them. Most of the time you get a 90's like pc or a poorly imitated Apple product. Lenovo now has the Thinkpad and things like the Yoga. Make a PC people want and you will do at least ok. At some point equilibrium will be reached with mobile.

The PC industry needs to rethink their strategy aside from making devices people actually want to buy. The subsidy model really helps people afford mobile devices. Not many people pay full price for a phone upfront but get them on contract and many tablets are simply less expensive than PCs. If the PC industry allies with service providers and offers subsidized PCs for a 2 year subscription maybe that will give a small boost to PC sales. Maybe Netflix, Hulu, Amazon Prime or other subscription type providers would be interested in locking people in with a small incentive in the form of a subsidized PC.

Ultimately it is going to take good hardware and design and some sort of incentive to get PCs growing again rather than just becoming flat once the dive has settled.