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October 12, 2016

Low consumer demand sees global PC sales continue to shrink

Market research firm Gartner has said that worldwide PC shipments fell 5.7% to 68.9 million units in the third quarter of 2016.

By CBR Staff Writer

The fall in PC shipments marks the eighth consecutive quarterly decline due to continued lacklustre demand.

The quarter saw PC makers facing many challenges, including weak back-to-school demand and ongoing low demand in the consumer market, particularly in emerging markets.

Gartner principal analyst Mikako Kitagawa said: “There are two fundamental issues that have impacted PC market results: the extension of the lifetime of the PC caused by the excess of consumer devices, and weak PC consumer demand in emerging markets.”

“In emerging markets, PC penetration is low, but consumers are not keen to own PCs. Consumers in emerging markets primarily use smartphones or phablets for their computing needs, and they don’t find the need to use a PC as much as consumers in mature markets.”

The research firm said that the quarter witnessed continued consolidation in the PC market, with the top six vendors accounting for 78% of PC shipments.

Despite recording a decline in PC shipments for six consecutive quarters, Lenovo pcsretained the top spot in the industry, followed by HP and Dell.

However, HP and Dell saw a growth in their shipments in Q3 when compared to the second quarter of 2016.

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Gartner said that the stabilisation of the PC business market was primarily responsible for HP to show a shipment growth.

In the US market, PC shipments fell 0.3% to 16.2 million units in the third quarter against the same period a year earlier.

Kitagawa said. “Traditionally, the third quarter has been driven by back-to-school PC sales, but back-to-school marketing campaigns have become less effective for driving PC sales.

“With so many PCs already in the consumer market, US consumers do not feel the need to buy new PCs; many parents hand down old PCs to their kids.”

In Asia-Pacific, shipments totalled 24.7 million units, down 7.6% from the year-ago quarter.

PC shipments in China are estimated to have dropped 4.8% in the quarter, as consumer sales in the country continue to be driven by notebook shipments.

EMEA shipments fell 3.3% to 19.2 million units in the quarter, due to very weak demand in Eastern Europe, Eurasia, and the Middle East and Africa.

Separately, Gartner also projected worldwide semiconductor capital spending to decline 0.3 per cent in 2016, to $64.6 billion.

This is up slightly from the estimated 0.7 per cent decline in Gartner’s previous quarterly forecast. The market is expected to return to growth in 2017, increasing 7.4 per cent.

“As we enter the final quarter of 2016, growth returned to the semiconductor manufacturing industry, with a slightly improved capital investment outlook for 2016 compared to last quarter’s forecast,” said David Christensen, senior research analyst at Gartner. “The outlook for equipment has recovered significantly as logic manufacturers focus their spending on ramping fabs for the introduction of high-volume 10-nanometer production in 2017, and memory producers are focusing on the move to 3D NAND flash.”

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