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Apple’s iPad has left the traditional PC market in a state of flux and in a painful bit of irony for Apple’s competition, the Cupertino company is also one of the few manufacturers whose traditional PC business managed to grow last quarter. Research firm IDC released its first-quarter figures on Wednesday and detailed bleak times for the bulk of PC makers in the U.S. and globally. Stateside,Genuine Windows 7 Key, Apple and Toshiba were the only companies with significant market shares whose shipments grew year-over-year; Apple’s shipments climbed 9.6% to 1.375 million units and Toshiba shipped 1.663 million units for a 10.4% increase. Overall however, the market was down 10.7%, with Dell and Acer having recorded the biggest loses. Dell’s shipments declined 11.8% while Acer’s U.S. PC shipments slid a massive 42.1% year-over-year, from 2.298 million units in the first quarter of 2010 to 1.331 million in the same quarter this year. Globally, Lenovo was the biggest winner as its shipments grew an impressive 16.3% to 8.172 million units. Acer was again the biggest loser, with total shipments dropping 15.8% from 10.733 million units in the first quarter last year to 9.039 million units in the first quarter of 2011. Hit the jump for IDC’s full press release.
Global PC Market Contracts in the First Quarter, But Swaths of Growth Remain, According to IDC
13 Apr 2011
FRAMINGHAM, Mass., April 13, 2011 – 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 (1Q11) compared to the same time last year, according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker. 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.
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,” said Jay Chou, senior research analyst with IDC’s Worldwide Quarterly PC Tracker. “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 Mini Notebooks 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.”
“The U.S. and worldwide PC market continues to work through a difficult period that we expect will continue into next quarter,Office Professional 2010 Key, but will start to improve in the second half of the year,” said Bob O’Donnell, program vice president, Clients and Displays. “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.”
Regional Outlook
United States – After strong gains for most of 2010, the market has now seen yet another inflection point in the rubber-band effect of the demand cycle that has become prevalent over the past two years. Demand fell back as buyers shifted focus and shipments declined over 10% compared to last year. 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, which, combined with sustained high inventory levels in the retail and distribution channel, constrained most vendors’ “sell in” levels this quarter. Growth was expected to remain constrained after a difficult year-on-year comparison and the growth achieved in 1Q10, but demand failed to sustain stronger levels to stimulate higher “sales in” levels in March. The additional impact of the recall of Sandy Bridge systems already in the channel only affected small volumes, but had an adverse impact in terms of cancelled and delayed orders and contributed to some additional disruption. Japan was slightly below forecast with a year-over-year decline in shipments of 15.9%. Despite an already conservative forecast that reflected a relative lack of public sector projects, 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 1Q11, similar to the trend in the fourth quarter of 2010. Despite the Lunar Year season, China failed to reach double-digit growth. However, other major markets helped to pick up some of the slack.
Vendor Outlook -
HP declined 2.8% compared to the first quarter of 2010. The vendor managed to outperform most markets, taking advantage of surging demand in Latin America, but struggled in Asia/Pacific (excluding Japan). Dell experienced disappointing sales in its key markets, including lackluster consumer demand in the U.S. and tepid business volume, but the decline was offset by significant strides in emerging markets, including major wins in PRC. The vendor slightly outperformed the market with volume declining at 1.8%. Acer was affected by continued turbulence in EMEA, its biggest market. Moreover, the vendor is stilling feeling the pullback in the Mini Notebook and Consumer space, while its upcoming tablets have yet to fill in the void. In the U.S., Acer also ceded its place to a surging Apple in the US. 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. Both its Desktop and Portable PCs grew in double digits compared to the same quarter in 2010. Toshiba finished 1Q11 with 3.8% growth. Its unwavering focus on solid designs in the Portable PC space and a relative lack of exposure in the Mini Notebook segment helped it to keep on a steadier course. Solid gains were reported in all markets except EMEA.
Top 5 Vendors, Worldwide PC Shipments, First Quarter 2011 (Preliminary) (Units Shipments are in thousands)
Source: IDC Worldwide Quarterly PC Tracker, April 13, 2011
Table notes follow the last table
Top 5 Vendors, United States PC Shipments, First Quarter 2011 (Preliminary) (Units Shipments are in thousands)
Source: IDC Worldwide Quarterly PC Tracker, April 13, 2011
Tags: 2011, Acer, Apple, Dell, HP,Microsoft Office Professional 2007 Key, IDC, lenovo, market share, PC market, Q1,Microsoft Office Professional 2010 Key, Q1 2011,Microsoft Office Standard 2010 Key, Toshiba, US PC market