PC market in dire shape, Windows takes the blame

The PC market is in dire shape. It’s been falling for some time now, we all know that. But the first quarter of 2013 has been particularly bad.

According to tech research company IDC, PC sales fell 14% in the first few months of this year. That’s almost twice as big a decline as IDC had predicted and marked the worst quarter since IDC began tracking the PC market quarterly in 1994.

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It’s also the fourth consecutive quarter that the market’s declined. It’s not just IDC saying that things were really bad in Q1, by the way. According to Gartner, worldwide PC shipments totaled 79.2-million units in the first quarter of 2013, an 11.2% decline from the first quarter a year ago. Not as bad as what IDC’s saying, but still bad.

Perhaps as startling as IDC’s percentage decline though is Gartner’s assertion that the first quarter of 2013 represented the first time that global PC shipments had gone below the 80-million mark since 2009.

Emerging markets won’t save the PC either. According to Gartner principal analyst Mikako Kitagawa, the trend of people migrating their content to tablets and smartphones is no longer limited to mature markets. “Even emerging markets, where PC penetration is low, are not expected to be a strong growth area for PC vendors,” she said.

That’s to be expected. As IDC notes, fading Mini Notebook shipments have taken a big chunk out of the low-end market while tablets and smartphones continue to divert consumer spending.

But why should the decline be so much steeper than expected?

The answer, it seems, lies in Windows 8 and the poor reception Microsoft’s latest OS has received. “At this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market,” says Bob O’Donnell, IDC program vice president, clients and displays.

“While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the UI, removal of the familiar Start button, and the costs associated with touch have made PCs a less attractive alternative to dedicated tablets and other competitive devices. Microsoft will have to make some very tough decisions moving forward if it wants to help reinvigorate the PC market.”

That seems to be backed up by Gartner’s assertion that Apple and Lenovo were the only vendors among the top five in the US to experience PC shipment growth in the first quarter of 2013. While Lenovo’s flooding of the market with affordable, but well-built devices, Apple’s growth in a mature market like the US is most likely down to people making the switch over from Windows.

Even Lenovo’s growth though is flatter than it was a year ago. While its shipment growth rate exceeded the overall industry average, it was Lenovo’s slowest growth since the first quarter of 2009. The slowdown was attributed to a shipment decline in Asia/Pacific, where more than 50 per cent of Lenovo’s PCs were shipped.

Dell’s quarter was also pretty tough. The Texas-based manufacturer saw a shipment decline in all regions except Japan.

Corporate hope?

One area where traditional PC manufacturers may yet experience growth is in the corporate sector.

“Unlike the consumer PC segment, says Kitagawa, “the professional PC market, which accounts for about half of overall PC shipments, has seen growth, driven by continuing PC refreshes. Despite the fact that some regions already passed the peak of PC refresh, overall professional PC demand continued to grow.”

The reason that’s happening is that traditional PCs are still vital in most workplaces. In the consumer sector, PC manufacturers are struggling to identify innovations that differentiate them from other products and inspire consumers to buy, and instead is meeting significant resistance to changes perceived as cumbersome or costly.