Consumers go off PCs as global shipments continue their decline

'Modest' growth in business segment suggests way ahead

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Global shipments of PCs continue to slow as consumer demand declines, according to preliminary analysis by Gartner, with only "modest" growth visible in the business segment.

Only 62.2 million units were shipped during the first three months of 2017, a 2.4 per cent drop compared to the same period of 2016. This is the first time in a decade that the PC market experienced shipments below 63 million units in a quarter.

While the industry experienced "modest growth" in the business PC market, this was offset by declining demand as consumers refrain from replacing older PCs or abandon them altogether.

Unlike for consumers, the business segment of the market still sees the PC as an important device, and it remains the main work device for many businesses. The top three vendors in this area – Lenovo, HP and Dell – are set to continue to dominate the large-enterprise segment.

"The market has extremely limited opportunities for vendors below the top three, with the exception of Apple, which has a solid customer base in specific verticals," said Mikako Kitagawa, principal analyst at Gartner.

Vendors

The competition among the top three vendors intensified in the first quarter of 2017. Lenovo and HP were in a virtual tie for the top spot, with Lenovo accounting for 19.9 per cent of worldwide PC shipments, followed by HP with 19.5 per cent, and Dell at 15 per cent. Lenovo's growth exceeded the regional average in all key regions except the US.

"While the consumer market will continue to shrink, maintaining a strong position in the business market will be critical to keep sustainable growth in the PC market. Winners in the business segment will ultimately be the survivors in this shrinking market," said Kitagawa.

"Vendors who do not have a strong presence in the business market will encounter major problems," Kitagawa warned, "and they will be forced to exit the PC market in the next five years. However, there will also be specialised niche players with purpose-built PCs, such as gaming PCs and ruggedised laptops."

Of the top six vendors – Lenovo, HP, Dell, Asus, Apple, and Acer – HP showed the strongest growth in the quarter with global PC shipments up 6.5 per cent, and up in all regions. HP did especially well in the US market, where it had a 15.9 per cent increase in PC shipments.

Dell, meanwhile, achieved four consecutive quarters of year-over-year growth, and had PC shipment increases in all regions except the US. Dell enhanced its channel programme and expanded its share in the large-enterprise market.

These movements come as the PC industry faces price increases due to component shortages. "DRAM prices have doubled since the middle of 2016, and SSD has been in short supply as well," Kitagawa said.

"The price hike will suppress PC demand even further in the consumer market, discouraging buyers away from PC purchases unless it is absolutely necessary. The price hike started affecting the market in the first quarter of 2017. This issue will grow into a much bigger problem in the second quarter of 2017, and we expect it to continue throughout 2017." ®


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