PC sales slammed as shipments drop ahead of Windows 10

Steven Loeb · July 10, 2015 · Short URL: https://vator.tv/n/3eb4

The market saw growth last year with the death of Windows XP, and now they've come back to Earth

Earlier this year, something kind of remarkable happened: the long declining PC market saw a teeny tiny upswing. It was only 1%, but it was the first time the market had seen anything but a downturn for two years.

We all knew it couldn't last, and, well, it didn't. Only a couple of quarters later, the same market has seen its largest drop in almost two years. That's how quickly things can change. 

Worldwide PC shipments fell 9.5 percent year to year in the second quarter of 2015, according to data out from Gartner, down to a total of 68.4 million units. This represented the steepest decline in PC shipments since the third quarter of 2013.

In the U.S., PC shipments declined 5.8% to 15.1 million in the second quarter of this year. The decline of desk-based units was so bad, dropping double digits, that it completely offset single-digit growth of mobile PCs. The desk-based PC shipment decline was the steepest since 2009, and that was when the market was hit by the economic crisis.

Levono led the world in PC shipments, with 13.5 million, but the company still saw a decline for the first time since the second quarter of 2013, dropping 6.8%. Every single manufacturer saw a year to year decline during the quarter with Acer, dropping 20.2%, getting hit the hardest.

In a statement, tried to put a happy face on what was not so happy news.

"Lenovo is gratified to see continued growth of our market share in our core PC business, which is a strong, powerful growth engine for the company. PC's are still the heart of our business, and we have ample opportunity for continued growth there," the company said

" Meanwhile, our strength in PC fuels the rest of our strategy -- building new growth engines in Enterprise, mobility and ecosystem, and transforming ourselves from a company that simply sells devices to a one that builds enduring customer relationships through unique products that bring hardware, software and cloud services together in compelling, easy to use experiences. That is our focus as we look ahead, and continuing to win in PCs is key to delivering on this vision."

HP led in the U.S. with 3.9 million units, but it too saw a big drop of 10.1%, the largest of any of the major manufacturers. Only one company saw an increase year to year: Lenovo, with actually wound up rising 9.7%, so at least there's that.

Gartner defines as desktop computers, notebooks, and “ultramobiles," or laptop/tablet hybrids. IDC, which does not include hybrids, or any other type of tablet, in its statistics, also released its own numbers on the PC market as well, and they were even worse: a decline of 11.8% to 66.1 million units.

Overall, Gartener is expecting PC sales to drop 4.4% in 2015, though they do expect it "to go back to slow and steady growth in 2016."

So what caused such a big decline this quarter? It is explained by both research companies as being a result of inflated numbers last year, when the impending death of Windows XP, and the coming launch of Windows 10, resulted in companies buying new machines in anticipation for the launch. 

"The weakness of desk-based PC shipments in the second quarter of 2015 is partly due to relatively large shipments in the second quarter last year when the market was driven by the end of XP support," Mikako Kitagawa, principal analyst at Gartner, said in the report. 

"The worldwide PC market experienced unusually positive desk-based growth last year due to the end of Windows XP support. After the XP impact was phased out, there have not been any major growth drivers to stimulate a PC refresh. Lastly, the Windows 10 launch scheduled for 3Q15 has created self-regulated inventory control. PC vendors and the channels tried clearing inventory as much as possible before the Windows 10 launch."

Now that Windows 10 is going to be available for everyone at the end of this month, what does that mean for the market? Basically that it is going to stabilize, since those who would have bought a new machine probably already did, and everyone else will just upgrade their operating system on their existing PC.

We're expecting the Windows 10 launch to go relatively well, though many users will opt for a free OS upgrade rather than buying a new PC. Competition from 2-in-1 devices and phones remains an issue, but the economic environment has had a larger impact lately, and that should stabilize or improve going forward," Loren Loverde, Vice President, Worldwide PC Trackers & Forecasting at IDC, said.

Long the rule in computing, think all the way back to the Apple II in the 1980s, PCs have been on the decline for the last three years, thanks in large part to the rise in tablets. In 2012, PC shipments dropped 2.6%, then a startling 11.1% in 2013.

While tablets have penetrated the big markets, and are seeing some stabilization as well, there is more trouble on the horizon, though, for the PC. As emerging markets are more mobile-centric than established ones, they have no use for big personal computers. That is why, worldwide, PC shipments decline 9.5% year to year.

The death knell for the PC has been coming for a while now, and these numbers show that it is not slowing down at all.

(Image source: forum.kerbalspaceprogram.com)

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