Worldwide PC shipments down 2.4% y-o-y in 1Q17, says Gartner

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KUALA LUMPUR (April 12): Worldwide personal computer (PC) shipments totalled 62.2 million units in the first quarter of 2017 (1Q17), a 2.4% decline year-on-year (y-o-y), according to preliminary results by Gartner Inc.

In a statement today, the information technology research and advisory company said 1Q17 was the first time since 2007 the PC market experienced shipments below 63 million units in a quarter.

The PC industry experienced modest growth in the business PC market, but Gartner said this was offset by declining consumer demand. Consumers continued to refrain from replacing older PCs, and some consumers have abandoned the PC market altogether. The business segment still sees the PC as an important device, and it's the main work device for businesses.

"While the consumer market will continue to shrink, maintaining a strong position in the business market will be critical to keep sustainable growth in the PC market. Winners in the business segment will ultimately be the survivors in this shrinking market," said Gartner principal analyst Mikako Kitagawa.

"Vendors who do not have a strong presence in the business market will encounter major problems, and they will be forced to exit the PC market in the next five years. However, there will also be specialised niche players with purpose-built PCs, such as gaming PCs and ruggedized laptops," she said.

"The top three vendors — Lenovo, HP and Dell — will battle for the large-enterprise segment. The market has extremely limited opportunities for vendors below the top three, with the exception of Apple, which has a solid customer base in specific verticals," she added.

According to Gartner, competition among the top three vendors intensified in 1Q17. Lenovo and HP were in a virtual tie for the top spot. Lenovo accounted for 19.9% of worldwide PC shipments, followed by HP with 19.5% share, and Dell at 15%.

Lenovo's growth exceeded the regional average in all key regions except the US.

HP showed the strongest growth among the top six vendors, as its global PC shipments increased 6.5% in 1Q17. HP's shipments grew in all regions, and it did especially well in the US market, where it had a 15.9% increase in PC shipments.

Meanwhile, Dell has achieved four consecutive quarters of y-o-y growth. It had PC shipment increases in all regions except the US. Dell enhanced its channel programme and expanded its share in the large-enterprise market.

Gartner noted the PC industry is also experiencing a price increase. Over two years ago, the price hike was attributed to the local currency deterioration against the US dollar. This time around, the price hike is due to a component shortage.

"Dynamic random-access memory (DRAM) prices have doubled since the middle of 2016, and solid state drives (SSD) [have] been in short supply as well," Kitagawa said.

"The price hike will suppress PC demand even further in the consumer market, discouraging buyers away from PC purchases unless it is absolutely necessary. The price hike started affecting the market in 1Q17. This issue will grow into a much bigger problem in 2Q17, and we expect it to continue throughout 2017," she added.

Meanwhile, in the US, PC shipments totalled 12.3 million units in 1Q17, a 2.4% drop from 1Q16. The US market has experienced a modest decline for two quarters. Much of the decline is attributed to the weak consumer market.