Market research firm Gartner today is out with its latest data compiled during the third quarter of 2017. The data shows the overall PC industry continue to decline, with Apple also falling and facing increasing competition…
Gartner says worldwide PC shipments fell 3.6 percent year-over-year for a total of 67 million units. That’s down from 69.5 million units during the same quarter last year and marks the 12th straight quarter of declining PC shipments. Specifically in the United States, shipments fell by 10 percent, which offset the trends of stabilization elsewhere around the world:
In terms of specific vendors worldwide, HP and Lenovo are in a “virtual tie” for the top spot in the industry. HP shipped 14.5 million units, while Lenovo shipped 14.3 million. HP saw growth of 4.4 percent whereas Lenovo slipped slightly, falling 1.5 percent year-over-year.
Next is Dell with 10.1 million shipments, down by 0.4 percent, followed by Asus with 4.8 million shipments for a 9 percent decline. Apple ranks as the fifth vendor with a 6.9 percent share of the market and 4.6 million shipments. For Apple, that’s a 5.6 percent decline year-over-year.
IDC, another market research firm, also released its data for Q3 2017 today and it tells a slightly different story. IDC reports a much smaller 0.5 percent decline in worldwide PC shipments with Apple shipping 4.9 million units for 0.3 percent growth year-over-year.
The important thing to note with IDC and Gartner data is that it’s very much preliminary information. Apple has yet to release shipment information for last quarter, but we should get to see just how accurate Gartner and IDC are when Apple announces Q4 2017 earnings on November 2nd.
Traditional PC Market Further Stabilizes As Top Companies Consolidate Share, According to IDC
FRAMINGHAM, Mass., October 10, 2017 – Worldwide shipments of traditional PCs (desktop, notebook, workstation) totaled 67.2 million units in the third quarter of 2017 (3Q17), which translates into a slight year-over-year decline of 0.5%, according to the International Data Corporation (IDC) Worldwide Quarterly Personal Computing Device Tracker. The results were better than projections of a 1.4% decline, and further demonstrate the trend of market stabilization in recent quarters. Improvement in emerging markets as well as back-to-school promotions helped boost results.
The component shortages of recent quarters have continued to improve and did not factor as a significant hindrance to production volumes. Nonetheless, higher component prices and inventory in some markets meant limited shipments and validated IDC assumptions about a muted third quarter. Not surprisingly, competitive pressures further cemented the dominance of the top five PC companies, which accounted for nearly 75% of the total traditional PC market.
From a geographic perspective, mature markets as well as emerging markets both struggled, with the notable exceptions of Japan and Canada, which continued to see positive growth in 3Q17, and Latin America, which rebounded after a dismal 2016 and first half of 2017.
“The traditional PC market performed much as expected in the third quarter,” said Loren Loverde, program vice president, Worldwide PCD Trackers. “Emerging markets rebounded slightly more than anticipated, but overall results reflect the stabilization we expected following component and inventory adjustments. The outlook for the fourth quarter remains cautious, likely with a small decline in volume for the quarter and the year. The gains in emerging regions and potential for more commercial replacements represent some upside potential, although we continue to expect incremental declines in total shipments for the next few years.”
“The U.S. traditional PC market exhibited lower overall growth, contracting 3.4% in 3Q17,” said Neha Mahajan, senior. research analyst, Devices & Displays. “Despite the overall contraction, Chromebooks remain a source of optimism as the category gains momentum in sectors outside education, especially in retail and financial services.”
Regional Highlights
United States: The U.S. traditional PC market experienced a fresh decline in shipments in 3Q17 with a notable drop in notebook sales. Continuing pressure from other mobile devices along with inventory management contributed to a drop in notebook shipments. Although, desktops did perform better than forecast, the category also experienced another declining quarter. Overall, total PC shipments for 3Q17 stood at 16.6 million units.
Europe, Middle East and Africa (EMEA): The EMEA traditional PC market continued to show clear signs of progress towards stabilization for another quarter. With customers increasingly adopting a mobility mindset, notebooks were undoubtedly the drivers for the EMEA PC market. Although desktops continued to erode, growing interest in gaming contributed towards keeping the desktop market afloat.
Asia/Pacific (excluding Japan): Traditional PC market results in Asia/Pacific (excluding Japan) came in close to expectations. China performed slightly better than anticipated following successful efforts of inventory clearing, which allowed for higher sell-in in the consumer and SMB segments. Shipments in India were supported by market recovery after the GST reform, while the education sector benefited from roll out of the ELCOT project.
Japan: The Japan traditional PC market showed stable growth in 3Q17, primarily driven by refresh projects and migration to Windows 10 as well as further notebook adoption. As a result, the year-over-year growth of the overall Japan traditional PC market will be in line with forecast.
Company Highlights
HP Inc. retained the top spot and further lengthened its lead with nearly 23% share of the market, helped in part by major wins in Asia/Pacific. HP was the only top vendor to manage a notable shipment increase with growth of 6% on the year.
Lenovo held the second position with volume holding flat at 0.1% year-over-year growth. The company continued to struggle in North America, with weak notebook sales, but also seemed to have slowed its recent decline in Asia/Pacific.
Dell remained in the third position, and grew 0.8% year over year. Dell fared well internationally, but saw declining volume in North America.
Apple kept the fourth position, keeping shipments roughly flat with growth of 0.3% year over year.
ASUS retained the fifth position, but was the only company in the top 5 to decline faster than the market average.
Gartner Says Worldwide PC Shipments Declined 3.6 Percent in Third Quarter of 2017
Traditional Promotions, Such as Back-to-School Sales, No Longer an Effective Growth Driver
STAMFORD, Conn.–(BUSINESS WIRE)–Worldwide PC shipments totaled 67 million units in the third quarter of 2017, a 3.6 percent decline from the third quarter of 2016, according to preliminary results by Gartner, Inc. This is the 12th consecutive quarter of declining PC shipments.
“While there were signs of stabilization in the PC industry in key regions, including EMEA, Japan and Latin America, the relatively stable results were offset by the U.S. market, which saw a 10 percent year-over-year decline in part because of a very weak back-to-school sales season,” said Mika Kitagawa, principal analyst at Gartner. “Business PC demand, led by Windows 10 upgrades, continued to drive PC shipments across all regions, but its refresh schedule varies by region. The countries with stable economies, such as the U.S., have created a positive sentiment among businesses, especially for small and midsized businesses (SMBs), which are more vulnerable to external events, such as economic or political.”
There are ongoing component shortages, with DRAM shortages getting particularly worse during the third quarter of the year compared with the first half of 2017. “The component price hike impacted the consumer PC market as most vendors generally pass the price hike on to consumers, rather than absorbing the cost themselves,” Ms. Kitagawa said. “We expect the DRAM shortage to continue to the end of 2018, but it will not be reflected in the final PC prices immediately.”
In the third quarter of 2017, HP Inc. and Lenovo were in a virtual tie for the top spot in the PC market based on shipments (see Table 1). However, HP Inc. is in an upward trend, as it has experienced five consecutive quarters of global PC growth, while Lenovo is in a downward trend with declining shipments in eight of the last 10 quarters.
HP Inc. experienced growth in all key regions, except the U.S. market. The company experienced double-digit growth in Latin America, while in Asia/Pacific HP Inc. secured positive growth for the fifth consecutive quarter. Lenovo experienced its steepest year-over-year decline of PC shipments in the U.S. since it acquired the IBM PC business division in 2005. Lenovo continues to face the dilemma of market share gains versus profitability. It appears the company is putting more emphasis on profitability than share gain. Dell’s worldwide PC shipments were slightly down compared with a year ago, as it registered its first year-over-year shipment decline since the first quarter of 2016.
In the U.S., PC shipments totaled 14.7 million units in the third quarter of 2017, a 10.3 percent decline from the third quarter of 2016 (see Table 2). It was the fourth consecutive quarter of declining PC shipments.
“Weak back-to-school sales were further evidence that traditional consumer PC demand drivers for PCs are no longer effective,” Ms. Kitagawa said. “Business PC demand is stable in the U.S., but demand could slow down among SMBs due to PC price increases due to component shortages.”
PC shipments in EMEA totaled 19 million units in the third quarter of 2017, a 1.1 percent decline year over year. The contraction in the Western European PC market appears to have slowed down, with the potential for stability in the fourth quarter of 2017. Eastern Europe is experiencing flat to small unit declines as demand is not improving, and there is no obvious impact yet from the Windows 10 migration in the business segment.
In Asia/Pacific, PC shipments reached 24 million units in the third quarter of 2017, down 2.1 percent from the same period last year. While consumer demand remained lackluster, PC demand in the business segment remained steady, especially for notebooks. In China, the PC market is estimated to have declined by 5 percent in the third quarter of 2017, with more stability in the business market, particularly in large enterprises, than in the consumer space.
These results are preliminary. Final statistics will be available soon to clients of Gartner’s PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe.
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