The PC Market Is Recovering, Albeit Slowly
Over the past 2-3 years, an upsurge of mobile devices had eaten into PC sales. A new report by Gartner however indicates a slow, but consistent improvement following the steep decline. According to the research firm, global PC shipments totaled 83.7 million units in the fourth quarter of 2014, a 1 percent increase from the fourth quarter of 2013.
Installed base PC displacement by tablets peaked in 2013 and the first half of 2014. Now that tablets have mostly penetrated some key markets, consumer spending is slowly shifting back to PCs,” notes Mikako Kitagawa, principal analyst at Gartner.
“However, there are regional variations. Mostly, mature regions show an ongoing trend of positive growth, but emerging markets remain weak,” Ms. Kitagawa said. “The U.S. showed the highest growth in the fourth quarter of 2014. In EMEA, the Western Europe PC market also showed good consumer sales. Emerging markets, on the other hand, still showed weak PC growth. We attribute this weakness to a strong affinity for smartphones and tablets in those markets, while PCs are a low priority. Even low priced notebooks struggle to succeed, because of the different mobile device usage patterns.”
Lenovo held the top spot in PC shipments in the fourth quarter of 2014, with 19.4 percent of the market, with strong growth in EMEA and the U.S., but shipments declined in Latin America and Japan. The share difference between Lenovo and HP narrowed in the fourth quarter of 2014 with HP growing 16 percent and garnering 18.8 percent of the market. HP has expressed its commitment to the device market, and it has started to show a positive result with strong growth in the U.S. HP’s growth in EMEA and Asia/Pacific also exceeded the regional average.
Dell continued to maintain the third position and accounted for 12.7 percent of the market. The fourth quarter 2014 results indicate that Dell’s expansion into the consumer market has been successful, which was the least focused market for the company prior to the leveraged buyout.
In the U.S., PC shipments totaled 18.1 million units in the fourth quarter of 2014, a 13.1 percent increase from the fourth quarter of 2013 (see Table 2). This is the fastest growth seen in the market in the last four years. HP showed the strongest growth among the top 5 vendors, as its shipments grew 26.2 percent, and it accounted for 29.2 percent of all shipments in the U.S.
“The fourth quarter of 2014 was the best holiday for PC sales in recent history. The primary driver was mobile PCs including regular notebooks, thin and light notebooks and 2-1s. Low priced notebooks with about a $300-200 price point boosted shipments while thin/light notebooks and two-in-ones (laptops with a detachable or bendable screen) showed strong growth. These results supports our assumption that consumer spending is returning to the PC as tablet penetration has reached the majority of the market,” said Ms. Kitagawa.
PC shipments in Europe, Middle East and Africa (EMEA) totaled 26.5 million units in the fourth quarter of 2014, a 2.8 percent increase from the fourth quarter of 2013. The slight growth in EMEA was driven by Western Europe with good consumer notebook shipments during the holiday season. The low prices of these devices were enough to take attention away from Android devices, but had a negative impact on average selling prices (ASPs) and vendor margins. Given relative price-points, users were attracted to notebooks and two-in-ones instead of tablets. These two-in-one hybrid devices performed very well, as users looked at replacing some older tablets and notebooks with these new devices that combine features of both.
The Asia/Pacific PC market showed a modest recovery as PC shipments totaled 26.6 million units in the fourth quarter of 2014, a 2 percent increase from the fourth quarter of 2013. Though as a region the news is positive, there are still growth variations by country. The overall trend is towards a slowdown of declining growth with mature markets in Asia/Pacific leading the recovery. This bottoming out of the market suggests that the installed base is stabilizing, and replacement demand is recovering.
“However, consumers continue to be attracted to smartphones, especially in emerging markets such as China and India where it is increasingly difficult for PC vendors to convince consumers to put priority on PC purchases,” said Ms. Kitagawa. “Users here are more focused on content consumption or on specific tasks where functions can be handled by a smartphone. Coupled with limited disposable income, these buyers are delaying PC purchases if they do not see the need, therefore making the consumer market more lackluster than what it used to be.”
Lenovo and HP were in a virtual tie for the overall lead in PC shipments in 2013. In 2014, Lenovo extended its lead as the top vendor based on worldwide shipments, as it accounted for 18.8 percent of units shipped (see Table 3). HP was the No. 2 vendor as its units represented 17.5 percent of shipments in 2014.
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