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October 11, 2012

Worldwide PC shipment slump over 8% during third quarter

Worldwide PC market in 2012 is expected to contract by 1.2% to 348.7 million units, witnessing decline for the first time since 2001

By CBR Staff Writer

Worldwide PC shipments declined sharply by over 8% during the third quarter of this year compared to last year ahead of much anticipated Windows 8 launch later this year, according to analysts.

According to Gartner, during the quarter 87.5 million units of PCs were shipped, which is a 8.3% decline compared to third quarter of 2011.

IDC Worldwide Quarterly PC Tracker also revealed similar contraction in PC shipment with 8.6% decline in shipment during the quarter.

Gartner principal analyst Mikako Kitagawa said continuing slowdown in consumer PC shipments played a big part in the overall PC market decline.

"The third quarter was also a transitional quarter before Microsoft’s Windows 8 operating system release, so shipments were less vigorous as vendors and their channel partners liquidated inventory," Kitagawa said.

"Retailers were conservative in placing orders as they responded to weak back-to-school sales. By the end of September, retailers were focused on clearing out inventory in advance of the Windows 8 launch later this month," Kitagawa added.

"On the professional side, there was minimum impact from Windows 8 in the quarter because the professional market will not adopt Windows 8 PCs immediately after the release."

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IDC analysts on the other hand said, continued pressure from other products such as tablets and smartphones ate into the PC market, while uncertainty over the impact of Windows 8 and the economic outlook led to the decline.

IDC senior research analyst Jay Chou said the industry had already went through a rough second quarter, and now the third quarter was even worse.

"A weak global economy as well as questions about PC market saturation and delayed replacement cycles are certainly a factor, but the hard question of what is the ‘it’ product for PCs remain unanswered."

"While ultrabook prices have come down a little, there are still some significant challenges that will greet Windows 8 in the coming quarter," Chou said.

IDC Personal Computing research director David Daoud said while the industry has been focused on shaving excess inventory and preparing to launch a new generation of products, consumers have been looking at alternative devices like tablets.

"Nevertheless, as vendors line up innovative new products and designs, consumers are likely to respond positively during the tail-end of 4Q12, and that means a potential return to positive growth at the end of this year," Daoud said.

IHS iSuppli forecasts a grim outlook in the coming quarter saying that the worldwide shipments set to decline in 2012 for the first time in 11 years.

Worldwide PC market in 2012 is expected to contract by 1.2% to 348.7 million units, down from 352.8 million in 2011 and the industry will be witnessing the decline is for the first time since 2001.

IHS senior principal analyst for computer systems Craig Stice said that there was great hope through the first half that 2012 would prove to be a rebound year for the PC market.

"Now three quarters through the year, the usual boost from the back-to-school season appears to be a bust, and both AMD and Intel’s third-quarter outlooks appear to be flat to down," Stice said.

"Optimism has vanished and turned to doubt, and the industry is now training its sights on 2013 to deliver the hoped-for rebound. All this is setting the PC market up for its first annual decline since the dot-com bust year of 2001."

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