The end of XP slows down decline in global PC market

When Microsoft finally ended support for Windows XP earlier this week, a lot of us braced ourselves for the inevitable conversation we’d have to hold with our less tech-savvy relatives. You know? The one about why they’d absolutely have to upgrade this time?

Well it turns out your stuck-in-the-mud relative wasn’t the only one reluctant to part ways with the massively popular OS. A whole load of businesses have been avoiding the upgrade too. For many of them, it seems, a large part of that reluctance was came down to the fact that they’d have to upgrade the machines running the OS at the same time.

It seems though that enough big businesses heeded Microsoft’s warnings about XP that it benefited the global PC market. According to technology research house Gartner, the global market, which has been in turmoil for some time now, totalled 76.6 million units in the first quarter of 2014, a 1.7% decline from the first quarter of 2013.

Okay, so PCs are still down but not by nearly as much as the 6.9% decline they saw in the previous quarter.

According to Mikako Kitagawa, principal analyst at Gartner, the end of XP hit some markets harder than others. “All regions indicated a positive effect since the end of XP support stimulated the PC refresh of XP systems.

“Professional desktops, in particular, showed strength in the quarter,” she says. “Among key countries, Japan was greatly affected by the end of XP support, registering a 35% year-over-year increase in PC shipments. The growth was also boosted by sales tax change. We expect the impact of XP migration worldwide to continue throughout 2014.”

“While the PC market remains weak, it is showing signs of improvement compared to last year. The PC professional market generally improved in regions such as EMEA. The US saw the gradual recovery of PC spending as the impact of tablets faded,” Kitagawa adds.

Despite the slowdown in the market’s decline, it’s still proving a tough place to be for a number of vendors. That said, there is still space for growth, as evidenced by Lenovo, Dell and HP which all also grew their marketshare.

Lenovo once again experienced the strongest growth among the top five vendors. Its shipments grew 10.9% and saw the company extended its position as the worldwide leader.

The company’s shipments grew in all regions except Asia/Pacific, where growth in China has been problematic. Overall, the China market slowed again, in part due to the long holiday in the middle of the quarter.

The share difference between Dell and HP once again narrowed compared to last quarter. In the first quarter of 2014, HP achieved its fastest shipment growth of the last two years. HP’s shipment growth in EMEA well exceeded the regional average, which improved HP’s overall growth.

Dell maintained a strong position in the market. Since the completion of the leverage buyout last year, Dell has been aggressively expanding its PC business throughout the regions. The first quarter of 2014 was the third consecutive quarter of PC shipment growth for Dell, registering its highest growth since the fourth quarter of 2011.

As for the kind of PCs we’re buying, it looks like traditional notebook volumes are seriously being squeezed. Instead, people are buying premium ultramobiles as notebook replacements, and — in more than a few cases — tablets. Gartner also expects hybrid device sales to keep growing.

It’s worth pointing out that this slowdown in the PC’s decline is unlikely to continue. Far more likely is that, come next quarter, it will return to the kind of steady slump we’ve seen over the past few years.