Wednesday, August 28, 2013

PC Shipments Drop for the Fifth Time - Analyst Blog

As per recent reports from Gartner and IDC, global shipments of personal computers have taken a hit. An 11.0% dip in PC shipments was noticed during the April – June quarter, as people gradually move away from PCs to handheld tablets and other mobile devices.

The industry research firm, Gartner, is of the opinion that the PC industry is going through the most difficult time as this is the fifth consecutive quarter of decline.

PC makers such as Hewlett-Packard Company (HPQ) and Dell Inc. (DELL) have incurred heavy losses in their PC business. This unprecedented decline resulted in Hewlett-Packard losing ground to Lenovo in the last quarter.

Another major reason for the decline in PC sales is related to the cost of the devices. In the emerging markets, consumers are opting for relatively inexpensive mobile computing devices such as tablets at the entry level.

As per the data provided by Gartner, Lenovo, with a 16.7% share of shipments, took the market-leading position from H-P, although shipment volumes of 12.68 million PCs declined 0.6% year over year.

Hewlett-Packard slipped to second position with a 16.3% share of shipments, down 4.8% on a year-over-year basis.

Dell secured third place, with a shipment share of 11.8%, up from 11.0% a year earlier, although shipment volume declined 3.9%.

Acer witnessed the biggest drop and now stands in the fourth place with 8.3% share of shipments, down 35.3% year-over-year. IDC's data more or less matches with Gartner, but is not exactly same.

H-P secured the top spot in the U.S. with a 26.4% share, followed by Dell with a 24.6% share, while Apple (AAPL) came in third place, with a 11.6% share, down from 12.0% in the year-ago quarter. Lenovo also had strong U.S. shipments, up 19.7%, at 1.52 million units, putting it in fourth place behind Apple's 1.74 million units.

The U.S. witnessed a 1.4% decline in the PC shipments to 14.98 million units, surpassing the global average, while the Europe, th! e Middle East, and Africa saw a decline of 16.8%, year over year. The Asia/Pacific also witnessed a drop of 11.5% to 26.8 million units.

We believe that the continuous decline in PC shipments raises a question regarding the future of the PC industry, which inturn may badly hurt the business prospects of companies relying substantially on the sale of PC's. This apart, the allied industries related to PC, such as the IT security service provider like Symantec Corp. (SYMC), may also feel the heat from the declining PC sales.

The ability to innovate and migrate to mobile platforms and/or data centers may be the only possible solution for these players.

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