Consumer PC Shipment Declines Less Steep in Q2 On Growth At Low End

An unexpectedly low 1.7 percent decline in worldwide PC shipments in Q2 is the smallest drop for the category since Q2 2012, when declining shipments of mini notebook PCs and a surge in tablet sales hit the PC market with a one-two punch, said a report by International Data Corp. (http://bit.ly/1q22a1L).

Worldwide PC shipments reached 74.4 million units in Q2 compared with a projected falloff of 7.1 percent, which IDC attributed to continued PC replacement business and returning consumer interest. Despite the end of Microsoft’s support for the Windows XP operating system in early April, XP migrations continue to take place, IDC said. Most major vendors saw “solid growth” in the quarter, with early indications that desktop shipments were stronger than expected in some areas, it said.

The consumer side also appears stronger than expected, with growth in lower priced models, including Chromebooks, according to IDC. Growth in PC sales was strongest in mature markets including Canada, Europe and the U.S., reflecting “more stable conditions,” it said, while emerging regions continue to experience declining PC shipments due to weaker economies and political issues.

It wasn’t clear how much of the revival in consumer interest came at the expense of the tablet market. In a report Wednesday DisplaySearch downgraded its 2014 forecast on global tablet shipments to 285 million units, from 315 million in its February forecast, after quarterly shipments declined year-over-year in Q1 for the first time. By 2017, annual growth rates will slow to single digits, DisplaySearch said, and it pushed out its forecast for tablets to break the 300 million-unit threshold in 2015 instead of this year. DisplaySearch cited competition from 5.5-inch-and-larger smartphones as driving forces, noting that tablet makers are likely to migrate to larger screen sizes with 11-inch and larger tablets predicted to account for more than 10 percent of the market by 2018.

Loren Loverde, vice president, IDC worldwide PC trackers, tempered the somewhat positive PC shipment results, citing “the rebound from weaker demand last year” and “potentially short-term replacement activity.” IDC expects some recovery in emerging regions going forward that may be offset by slower growth in mature markets. Despite the Q2 gains, IDC is maintaining its long-term outlook, but growth levels could “get closer to flat,” Loverde said, rather than hitting the May projection of minus 6 percent.

The PC industry remains “intensely competitive,” IDC said, driven by economies of scale and channel reach that are adding to a shift toward mobility and new designs that are driving market consolidation. The top five PC vendors grew shipments by 9.8 percent year-over-year in Q2, while the rest of the industry declined by 18.5 percent, it said.

In the U.S., improved alignment with channel partners and internal restructuring helped HP and Dell grow at a faster pace than the rest of the market, leading the two companies to have a combined market share of 53 percent, IDC said. Lenovo and Toshiba had the highest growth among the top five players, at 25 and 21 percent, said Rajani Singh, senior research analyst. “Moving forward, strong sales in the back-to-school season and healthy consumer sales in the holiday season should keep the U.S. PC market in positive territory for the rest of the year,” she said. Lenovo, Apple and Toshiba rounded out the top five with market share of 11.5 percent, 10 percent and 6.1 percent in Q2, according to data.

Corporate PC trends are similar in the Canada market, according to a post on the NPD blog Thursday. Since February, monthly PC revenue has been growing in double digits, with “higher-than-usual” spikes -- 27 percent in April and 21 percent in May -- over last year’s growth for the months, due to the Windows XP support phase-out. More than half of the revenue is due to the sale of Windows 8 PCs, NPD said.