A myriad of factors contributed to the first contraction in the worldwide PC market since the end of the recent recession. Global PC shipments declined 3.2% during the first quarter of 2011 (Q1 2011) compared to the same time last year, according to the International Data Corp. (IDC) worldwide quarterly PC tracker. The analysts believe that it becomes tremendously important for PC makers to explain the benefits of modern PCs over low-cost specialized solutions.
HP Remains on Top as Shipments Drop to 80.5 Million
During the first quarter of this year, around 80.557 million personal computers were shipped worldwide, which is a 3.2% decline compared to the first quarter of last year. HP remained the world's largest maker of personal computers, but its sales declined by 2.8% as well.
Although the forecast for the quarter was already conservative – IDC expected a mere 1.5% growth in shipments – a steady but still cautious business mentality and waning consumer enthusiasm persisted. A spike in fuel and commodity prices and the disruptions in Japan added to the mix, further dampening a market struggling to maintain momentum.
Top 5 Vendors, Worldwide PC Shipments, First Quarter 2011
HP remained the world's largest PC maker with 18.9% market share, but its shipments fell 2.8% year-over-year.
Dell experienced disappointing sales in its key markets, including lackluster consumer demand in the U.S. The vendor slightly outperformed the market with volume declining at 1.8%.
Sales of Acer Group (which controls 11.2% of the world's PC market) dropped by whopping 15.8% because of continued turbulence in EMEA and inability to offer competitive solutions that would replace netbooks.
Lenovo significantly outperformed the market with shipments posting 16.3% growth. The vendor continued its dominance in Asia/Pacific while maintaining a disciplined channel expansion in other markets.
Toshiba finished Q1 2011 with 3.8% growth. Its unwavering focus on solid designs in the portable PC space and a relative lack of exposure in the netbook segment helped it to keep on a steadier course.
Macroeconomics Forces May Have Limited Effect on PC Demand
The PC market showed clear indications that after more than a year of impressive purchases, frugality tinged with a shift of focus will be the norm for the time being. Despite promising economic sentiments, mature regions appear to be more focused on necessary replacements as a relative dearth of compelling reasons were present to buy secondary PCs. Emerging markets fared better due to lower saturation rates, but also slowed somewhat with Asia/Pacific (excluding Japan) slowing to a 5.6% growth and China continuing to cool off after a momentous 2010.
"While the consequences of events in the Middle East and Japan remain unclear, these will surely be factors that will influence short term market performance for 2011. Long-term success will depend on hardware manufacturers being able to articulate a message that is beyond simple hardware specifications. 'Good-enough computing' has become a firm reality, exemplified first by netbooks and now media tablets. Macroeconomic forces can explain some of the ebb and flow of the PC business, but the real question PC vendors have to think hard about is how to enable a compelling user experience that can justify spending on the added horsepower," said Jay Chou, senior research analyst with IDC's worldwide quarterly PC tracker.
Now IDC analysts believe that the U.S. and worldwide PC market continues to work through a difficult period that will continue into next quarter, but will start to improve in the second half of the year.
"Slower than expected commercial growth in the first quarter failed to offset the ongoing challenges in the consumer market. While it's tempting to blame the decline completely on the growth of media tablets, we believe other factors, including extended PC lifetimes and the lack of compelling new PC experiences, played equally significant roles," said Bob O'Donnell, program vice president of clients and displays at IDC.
In the United States demand fell back as buyers shifted focus and shipments declined over 10% compared to last year. In Europe, Middle East, Africa (EMEA) – PC shipments in the EMEA region contracted further than expected in the first quarter, in part the result of continued softness in the consumer space. The business segment also remained cautious. Japan was slightly below forecast with a year-over-year decline in shipments of 15.9% as the region struggled in part due to supply constraints and the effect of the earthquake which affected much of March. Asia/Pacific (excluding Japan) shipments increased only 5.6% in Q1 2011 as China failed to reach double-digit growth.