Oct 11, 2013 (05:10 AM EDT)
PC Market Mess: 8 Takeaways
Read the Original Article at InformationWeek
Even so, the third quarter wasn't an out-and-out disaster for all involved. Who were the winners and losers? Here are eight takeaways on the state of the PC industry.
1. The U.S. outperformed the global market but consumer sales are still poor.
As usual, IDC and Gartner agreed on the broad strokes but disagreed on the details: IDC said the U.S. contracted only slightly, whereas Gartner concluded U.S. shipments actually increased 3.5%. Shipments were very poor in the Asia/Pacific region, excluding Japan, and throughout Europe.
[ PCs are still essential to most small and mid-size businesses. Read Are PCs Dead? Not For SMBs. ]
Both firms suggested inventory refreshes and enterprise sales drove U.S. shipments -- so don't take the relatively healthy numbers as evidence of a consumer rebound. Consumer PC sales are typically high during third-quarter "back to school" promotions, but Gartner analyst Mikako Kiagawa said in a statement that third-quarter sales were at their lowest since 2008.
2. Lenovo is the PC market's clear winner.
Lenovo not only remained the world's top PC maker, with around 17.5% of all units shipped, but also enjoyed a bigger year-over-year increase in shipment volume than any of its competitors. Lenovo placed fourth in the United States -- behind HP, Dell and Apple -- but nonetheless made gains. It snared 10.5% of the market, up from around 8.5% from a year ago and within striking distance of third-place Apple.
3. HP and Dell earned qualified wins.
HP ranked second worldwide and first in the U.S., and it increased its market share in both categories. Dell ranked third worldwide and second in the U.S., increased its worldwide market share, and -- depending on whether you trust IDC or Gartner -- was either slightly up or flat in U.S. market share. Both HP and Dell shipped slightly more units than they did the year before. All in all, it's an encouraging showing, given the overall market conditions.
But both companies face concerns. Neither has established itself as a strong mobile brand. Both are still adjusting, as HP CEO Meg Whitman alluded this week, to the PC slump's ripple effects: Microsoft now competes with its own OEMs via its Surface line; Dell and HP can no longer support their device businesses via Windows alone and are turning toward Android and Chrome OS; and so on. HP's and Dell's third-quarter success also deserves an asterisk because both relied to some extent on low-margin hardware, which doesn't really help the bottom line.
4. Enterprises still need PCs.
Windows XP will lose service in April but still ran on more than 30% of the world's PC's in September. Microsoft COO Kevin Turner said last month at the company's meeting for financial analysts that 21% of Microsoft's corporate customers were still using the operating system. Analysts have said for months that XP's retirement could help PC sales, with XP holdouts buying new machines as they move to Windows 7 or Windows 8. Both IDC and Gartner saw evidence of this trend in Q3.
Consumers have moved aggressively toward tablets, and slates are carving out roles in the workplace as well -- but the data is a reminder that many businesses continue to rely on PCs. Nonetheless, neither IDC nor Gartner project that modest enterprise sales will stop the PC slump, which both firms expect will continue into 2014.
5. Mac sales send mixed messages.
For at least the first half of the PC slump, MacBooks and iMacs seemed relatively impervious to the larger market's struggle. This resiliency might be fading: Apple's U.S. market share dropped year-over-year, although IDC and Gartner disagree by how much, and the company also shipped fewer units.
Should Apple be concerned? It's hard to say. Macs are obviously a small part of the Apple's iOS-dominated bottom line. Plus, OS X has gained global market share in the last year, albeit modestly. Apple's sales also aren't being propelled by enterprise refreshes like those of Lenovo, HP and Dell, which suggests Macs are performing relatively decently among consumers.
And though Apple's market share is modest, it devours a huge chunk of the industry's profit because it's the only manufacturer that sells high-margin computers in vast numbers. Apple also appears to have deliberately constrained its inventory, which might mean the company is trying to find the right supply-demand balance to sustain its place in the market, and which would somewhat explain the shipment reduction. Apple, which just refreshed its iMac line, is expected to launch a variety of new OS X products in coming months, including a redesigned Mac Pro and Haswell-based MacBook Pros later this year, and a MacBook Air with Retina display some time in 2014.
6. Tablets continue to cannibalize PC sales.
Both IDC and Gartner reiterated that tablets are cannibalizing PC sales. Tablets are approaching a sort of equilibrium with PCs in developed markets such as the United States but continue to eat heavily into desktop and laptop sales in emerging markets. An August IDC report said tablet growth is slowing modestly as markets mature, and as phablets and wearable tech begin vying for consumer dollars.
7. Asus and Acer are crumbling.
The new shipment figures were great for Lenovo, mostly positive for Dell and HP, and mixed for Apple -- but downright terrible for Asus and Acer. Both manufacturers shipped fewer PCs than they did in the third quarter of 2012, and both lost substantial market share. Neither ranked among the top five U.S. vendors, and Apple, despite slowing sales, might break into the global top five for the first time merely because Acer and Asus, who rank fourth and fifth internationally, are fading so fast. Both companies have shifted more of their attention to tablets.
8. Things are just as bad as they look for PCs.
PCs and PC operating systems aren't going extinct any time soon, but the PC market probably still hasn't hit rock bottom, and will never return to its glory days. The third-quarter numbers failed to improve from a meager baseline, even though sales should have been better in recent months due to the release of computers with Intel's Haswell processor, which improves battery life and graphics performance and makes thinner notebooks possible. Time will tell if sales improve over the holidays.