As per figures released by the International Data Corporation (IDC) Worldwide Quarterly PC Tracker, global PC market fell significantly in the third quarter of 2012. Shipments declined 8.6 percent from the third quarter of 2011. In fact, it has been shared that the results are even lower than IDC's August forecast of a 3.8 percent year-on-year market contraction.
Elaborating further, IDC shares that it had expected a “quiet quarter”, since the focus was on clearing out Windows 7 inventory to make space for Windows 8. However, IDC attributes low shipments to prolonged pressure from other products, such as tablets and smartphones, coupled with the uncertainty over the impact of Windows 8 and the economic outlook.
Shipments declined this quarter (Image Credit: Getty Images)
Elaborating on the figures, the IDC report said that although there has been a conservative outlook, the results depict the vulnerability of PCs and the current flow of thought among buyers who earlier rushed in time for back-to-school promotions in the third quarter for PCs. In such a scenario, persistent factors such as renewed economic issues and budget diversion into other devices too had a role to play. This, the report added led to all regions witnessing shipment volumes decline from a year ago.
“PCs are going through a severe slump,” said Jay Chou, senior research analyst, Worldwide PC Tracker. “The industry had already weathered a rough second quarter, and now the third quarter was even worse. A weak global economy as well as questions about PC market saturation and delayed replacement cycles are certainly a factor, but the hard question of what is the 'it' product for PCs remain unanswered. While Ultrabook prices have come down a little, there are still some significant challenges that will greet Windows 8 in the coming quarter.”
“We expected a weak PC market in the lead up to Windows 8 release in the fourth quarter. While the industry has been focused on shaving excess inventory and preparing to launch a new generation of products, consumers have been looking at alternative devices like tablets. In addition, businesses have slowed their refresh cycle as they remain concerned about the broad economic outlook, amid a busy political season,” said David Daoud, research director, Personal Computing at IDC. “Nevertheless, as vendors line up innovative new products and designs, consumers are likely to respond positively during the tail-end of 4Q12, and that means a potential return to positive growth at the end of this year.”
The US market was weaker than an already negative forecast, falling 12.4 percent compared with a forecast of minus 9.5 percent. IDC attributed these poor results to weaker consumer demand, including a weak back-to-school season, and an industry-wide inventory clean up. The consumer segment was hit primarily as buyers focused on competing products. Further, the commercial sector demand too had been affected by weaknesses and uncertainty in the broad global economy amid a heated presidential election season. IDC expects the growth pattern to resume to mid-single digits in the fourth quarter, and into next year with the launch of Windows 8 in the fourth quarter of 2012.
The EMEA market remained constrained as expected in the third quarter. July and August saw low sell-in levels as vendors focused on ensuring leaner inventory levels after a strong 2Q12. September sell-in was boosted, as anticipated, by the production of new Windows 8 systems, and an attractive Ultrabook and ultra-slim line-up set to hit the shelves end October. Continued economic pressure in the business space and competition from other devices for consumers, however, combined to keep the supply chain and buyers cautious.
Japan emerged as one of the stronger markets stemming from rebuilding efforts. Unfortunately, this 'strength' was only relative to other markets – achieved with shipments still falling short of flat from a year ago.
The APAC region continued to contract on a year-on-year basis, though growing sequentially from 2Q12. China was mostly on target but the rest of the region came in below expectations as ongoing economic sluggishness and competing device distractions weighed on PC spending this quarter.
IDC revealed that HP saw shipments contract more than 16 percent, as compared to what it was a year ago and narrowly held on to the top vendor spot. “Distractions caused by its reorganization, challenges in integrating its enterprise acquisitions, and an unclear strategy to regain its course remain key obstacles,” added the report.
Lenovo continued to stay at the top spot with the highest yearly growth among all top vendors. IDC found that Lenovo has continued its methodical approach to build out channel partnerships, and acquire key OEMs in markets outside home, with varying degrees of success. “Its persistence as well as missteps of its rivals helped Lenovo to maintain a top 5 position in the U.S., and gain a couple points of share to nearly tie HP for the lead in global shipments,” it added.
Dell saw a tough quarter, and its shipment values dropped below its own 2Q12 shipment volume. Dell's shares declined in all markets, and it ended the quarter with a 14 percent decline. “Tepid PC refresh activity in the U.S. and EMEA continued to be a key inhibitor for Dell. Although the company has made strides in other areas, with Asia/Pacific becoming its second biggest market after the U.S., its momentum there has also been curtailed by a cooling market,” wrote IDC.
Acer, according to IDC findings, faced an uphill climb to get back into growth mode since the market for low-priced notebooks dimmed. In the third quarter, Acer saw its shipments suffer a sequential decline, along with disappointing notebook volume. However, IDC projects that the company’s entry into Ultrabooks and Windows tablets could help to reverse its fortunes if Windows 8 finds solid acceptance.