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PC industry continues two-year downslide
October 16, 2016, 10:55 am

The global PC industry continued its downslide in the 3rd quarter of 2016. According to analyst firm Gartner, worldwide PC shipments in the third-quarter of the year fell 5.7 percent to 68.9 million units. That marked the “eighth consecutive quarter of decline in PC shipments, the longest duration of decline in the history of the PC industry," Gartner said in a preliminary press release issued last week

Weak back-to-school sales and lower demand in emerging markets were among the reasons cited by the firm for the smaller shipments. But the broader issue is more existential than that. "The PC is not a high priority device for the majority of consumers, so they do not feel the need to upgrade their PCs as often as they used to," said Gartner analyst Mikako Kitagawa. "Some may never decide to upgrade to a PC again."

The threat, of course, comes from smartphones, which have more aggressive upgrade cycles than PCs and have over time grown powerful enough to compete with desktop and laptop computers at performing less intensive tasks. Tablets too have become more capable and are increasingly becoming viable laptop replacements.

PC makers are feeling the pressure. HP, Dell, and Asus each had low single-digit growth, but Acer, Apple, and Lenovo all experienced declines, with Apple and Lenovo each suffering double-digit drops. Meanwhile, the rest of the PC market, which collectively ships more units per quarter than any of the big-name brands, is down more than 16 percent.

These results do have some bright spots. The PC makers that did experience year-over-year growth did so largely on the strength of 2-in-1 devices and strong sales in the US, which indicate a clear direction for the market going forward. There is also evidence that cheaper notebooks are becoming a more attractive replacement option as older computers get either handed down or given away. While the PC shipment report does not include Chromebooks, early indicator shows that Chromebooks exceeded PC shipment growth.

The PC market continues to consolidate, as the top six accounted for a record high 78 percent of PC shipments in the third quarter of 2016. Preliminary numbers show that Lenovo continued to be the worldwide market leader, with HP a close second. But Lenovo has recorded six consecutive quarters of year-over-year shipment declines, while the nearest competitors, HP  and Dell, have recorded shipment growth since the second quarter of 2016.                                                                                                                                                                     

Preliminary Worldwide PC Vendor Unit Shipment Estimates for 3Q16 (Thousands of Units)

3Q – 2016                                           3Q – 2015                   3Q-2016/2015

Brand              Shipments      Market Share (%)       Shipments      Market Share (%)   Change

Lenovo            14,434                             20.9                          14,789                 20.2                  -2.4

HP Inc.             14,058                              20.4                          13,744                 18.8                    2.3

Dell                  10,111                              14.7                            9,856                  13.5                   2.6

Asus                   5,397                                7.8                            5,271                    7.2                   2.4

Apple                 4,946                                7.2                             5,709                   7.8                -13.4

Acer                    4,613                                6.7                             5,370                   7.3                -14.1

Others               15,386                              22.3                           18,359                  25.1               -16.2

Total                  68,945                              100                              79,098                100                    -5.7                   

Data includes desk-based PCs, notebook PCs and ultra-mobile premiums (such as Microsoft Surface), but not Chromebooks or iPads.

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