PC shipments decline for the fifth consecutive quarter

| 15 July 2013

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Last week Gartner released their latest global PC shipment numbers for the last quarter and they don’t look pretty.

In fact they are rather worrying…

According to Gartner, the shipment of PCs has declined by 10,9%, or 76 million units, compared to the same time in 2012.

This signals the fifth consecutive quarter of declining shipments, making it the worst and longest decline in the history of the PC market.

HP and Lenovo continue to fight it out for the top position, but if anything, the new numbers show deeper problems within HP. Lenovo on the other hand moved to the number one position and actually grew in some markets including the EMEA region, where year-on-year growth was 21,2%. This was in a market where every other vendor declined.

Certainly for Lenovo the numbers are impressive and they seem to have bucked the trend. Recently I was in Beijing visiting Lenovo’s HQ and some of their PC manufacturing plants. You certainly got the sense of a company that has understood the changes in the PC industry, and is very much focused on growth – especially in emerging markets. They have also improved profitability, and their success can also be attributed to their product range. It has kept up with the market changes to include a wide range of products from tablets to smartphones and all in one PCs, as well as smart TVs, which they are calling the PC Plus era of computing. Yang Yuanqing, Lenovo’s CEO and Chairman, acknowledges the challenges in the market, but believes that these challenges still represent a $200 billion opportunity in this market.

But don’t write off the likes of HP, Dell, Acer and ASUS just yet.

They too are adapting to these changing market conditions, and are coming out with some really interesting products and innovations, especially in the tablet market.

The truth is that the market may take longer to recover – if at all.

Consumer’s demand has changed the PC market, and this decline in the PC industry can be attributed to three things:
The global economic crisis has certainly been a factor. As companies look at cost savings, IT budgets are always one of the first to be cut. Many organisations have opted out of the computer and software cycle upgrade.

Another factor, and probably the most relevant, is how we are using technology today, compared to three years ago.
The tablet revolution was triggered when the first iPad was launched on 3 April 2010. One just needs to look at how many people are using tablets in airports and coffee shops versus notebooks. Consumer behaviour has changed, and with the powerful smartphones and tablets in our hands, it is far more convenient to check things like email and read documents on tablets, than it is on a notebook or computer.

Gartner forecasts a total of 197 million tablets will be shipped in 2013; that’s a 69,8% increase on 2012 shipments of 116 million units.

The other reason for the decline of the PC is that older generation PCs are simply fast enough. Why do you need to upgrade if what you have is good enough? Gordon Moore, Intel’s co-founder, predicted in 1965 that every 18 months computing power would double, because technology advances meant they could fit more transistors per square inch on integrated circuits. He was right! Computers today have more power than most people will ever need, unless you’re a hard-core gamer, or need the power for graphic rendering. When was the last time you heard someone complain about a sluggish PC?

Has Moore’s Law come back to bite Intel? The reality is that PCs today are fast enough to do the everyday tasks like email and surfing the web.

Is the personal computer dead? Certainly not! We are in a new phase of computing where mobility is king. The game has changed and will continue to evolve, as wearable computing and how we interact with technology changes in the coming years.

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