PC sales are imploding

Cooling tower demolition implosionREUTERS/Steve DipaolaThe 499-foot cooling tower at the Trojan Nuclear Plant is imploded in Rainier, Oregon May 21, 2006.

PC sales are continuing to crash: New data from two research firms shows that the industry is declining fast, with a drop in sales year-on-year of around 10%.

On Wednesday, Gartner and IDC both published estimates for PC shipments in Q2 of 2015 — and it makes for unpleasant reading for hardware vendors.

Gartner says that sales have dropped by 9.5% over the last year, while IDC’s data is even more alarming — predicting a year-on-year decline of 11.8%.

The Wall Street Journal (where we first saw the data) points out this disparity is down to the fact that Gartner includes “ultramobile premium devices” (AKA certain tablet devices) in its figures, while IDC does not.

Gartner estimates negative growth for every major PC hardware vendor: Lenovo, the market leader, dropped by 6.8%, while Acer Group saw the biggest fall — a 20.2% decline. Overall, shipments dropped to 68.4 million, down from 75.6 million a year before.

Meanwhile, IDC’s data shows a more aggressive decline. Apple, which is not included in Gartner’s global data, is the only company to see any increase year-on-year. Its figures paint an even bleaker picture for Acer Group: A 26.9% decline. Its figures put Q2 2015 shipments at 66.1 million, down from 75 million in 2014.

Lenovo has attempted to put a brave face on the news. In a statement, President and COO Gianfranco Lanci says that the data shows “continued growth of our market share in our core PC business, which is a strong, powerful growth engine for the company.” He says that the company has “ample opportunity for continued growth” in the sector — despite the fact that while its percentage market share is increasing, its real term shipment numbers are dropping.

This is, as the Wall Street Journal points out, the biggest drop in almost two years (2.6% in 2012, 11.1% in 2013, 0.8% in 2014). There are three factors that Gartner identifies as contributing to this latest decline:

  1. “A sharp appreciation of the US dollar against local currencies,” is one according to principal analyst Mikako Kitagawa — making PCs more expensive.
  2. “The worldwide PC market experienced unusually positive desk-based growth last year due to the end of Windows XP support. After the XP impact was phased out, there have not been any major growth drivers to stimulate a PC refresh.”
  3. The upcoming launch of Windows 10: Kitagawa says “the Windows 10 launch scheduled for 3Q15 has created self-regulated inventory control. PC vendors and the channels tried clearing inventory as much as possible before the Windows 10 launch.” In short, people aren’t buying PCs as they wait for the latest OS from Microsoft — further denting sales.

Overall, Gartner is forecasting a decline of 4.4% in PC shipments throughout the entirety of 2015. The research firm expects the industry to return to “slow and steady growth in 2016.” But the data is clear: The age of the PC is now over.

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