PCs See Further Decline as Windows 8 Fails To Drive Demand

• By David Nagel
• 01/14/13

The worldwide PC market saw a worse-than-expected decline in the fourth quarter, leading to the first holiday season drop in five years--6.4 percent--and a 12-month decline of 3.2 percent. The United States in particular experienced a more mild decline, but saw an even deeper drop of 7 percent for the year as a whole, according to preliminary data released by market research firm IDC.

According to IDC's latest Worldwide Quarterly PC Tracker, PC shipments worldwide dropped 6.4 percent to 89.8 million units (compared to 99.5 million in the fourth quarter of 2011). IDC's previous forecast called for a more modest decline of 4.4 percent. The steeper drop was owing in part to the failure of Windows 8 to help bolster the market as PC's (desktops, laptops, sub-laptops, and workstations) "continued to take a back seat to competing devices," in particular tablets and smart phones.

"Although the third quarter was focused on the clearing of Windows 7 inventory, preliminary research indicates the clearance did not significantly boost the uptake of Windows 8 systems in Q4," said Jay Chou, senior research analyst with IDC's Worldwide Quarterly PC Tracker, in a prepared statement. "Lost in the shuffle to promote a touch-centric PC, vendors have not forcefully stressed other features that promote a more secure, reliable and efficient user experience. As Windows 8 matures, and other corresponding variables such as Ultrabook pricing continue to drop, hopefully the PC market can see a reset in both messaging and demand in 2013."

For the year, 352.4 million units shipped worldwide compared with 363.9 million in 2011.

HP, Lenovo, Dell, Acer, and ASUS led the pack worldwide in both quarterly and annual shipments. But among the top 5, only Lenovo and ASUS saw any growth during the quarter.

• In the top position, HP shipped 15 million units, just about flat (-0.6 percent) from Q4 2011. For the year, the company shipped 58.1 million units, down 6.7 percent.
• No. 2 Lenovo grew 8.2 percent to ship 14.1 million units in Q4 and grew 19.2 percent in the year to reach 52.5 million units.
• No. 3 Dell shipped 9.5 million, down 20.8 percent, int he fourth quarter and for4 the year slipped 12.6 percent to 38.7 million.
• Acer dropped 28.2 percent to 7 million units in the quarter and 9.7 percent to 33.5 million units for the year.
• And, rounding out the top 5, ASUS fell 5.6 percent to 6.5 million units in the fourth quarter but actually saw growth for the year as a whole, shipping 24.1 million units, a gain of 17 percent.

In the Unites States, Apple and Toshiba made the top 5, but only Lenovo and HP eked out any gains during the fourth quarter; Lenovo was the only manufacturer int he top 5 to see an improvement for the entire year.

"As anticipated, the U.S. market had a rough ending, dropping 4.5 percent in the fourth quarter and contributing to a decline of 7 percent for the full year 2012," said David Daoud, research director, IDC U.S. Quarterly PC Tracker, in a prepared statement. "Consumers expected all sorts of cool PCs with tablet and touch capabilities. Instead, they mostly saw traditional PCs that feature a new OS (Windows 8) optimized for touch and tablet with applications and hardware that are not yet able to fully utilize these capabilities. Despite a generally weak performance, some leading brands managed do to well relative to the market. HP, Lenovo, Asus, and Samsung were among the top performers, taking advantage of some consumer interest in Windows 8, and a push to build up their presence ahead of 2013."

• HP, in first place, rose 12.4 percent during the fourth quarter to 4.8 million units; it declined 3.9 percent for the year to 17.9 million.
• Dell, in second, fell 16.6 percent during the quarter to 3.5 million units; it dropped 11.5 percent for the year to 14.1 million.
• No. 3 Apple was about flat for the quarter and year. In Q4, Apple declined 0.2 percent to 2 million units; it slid 0.9 percent for the year, landing at 7.6 million units.
• Lenovo grew 11.6 percent in the fourth quarter, reaching 1.5 million; for the year, it grew 12.2 percent to 5.3 million units.
• Finally, Toshiba tumbled 33.9 percent in the fourth quarter to 1.3 million units; it lost 31.1 percent for the year, shipping 4.6 million units.

"The U.S. market struggled in the fourth quarter of 2012, although to a lesser extent than expected given the channel replenishment activity that occurred in December," according to IDC. "Some consumer activity took place in conjunction with the release of Windows 8. However, limitations in product offerings, in particular for touch screen Tablet PCs, led consumers to once again delay purchases. Consumer-focused vendors like HP and Asian majors like Lenovo, Asus, and Samsung managed strong performances, partly in response to modest consumer demand, and partly due to channel activity in December ahead of the anticipated [first quarter] Windows 8 push. The rest of the industry continued to take a wait-and-see approach as consumer attitudes toward Windows 8 are clarified.

Additional details can be found in IDC's Worldwide Quarterly PC Tracker.