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Brutal Quarter for PCs

PC sales were supposed to be ugly in the third quarter, but they came in even worse than expected.

Worldwide PC shipments contracted 8.6 percent in the third quarter of 2012 compared to the same period a year ago, according to preliminary figures released this week by IDC for the July-through-September period, which includes the critical back-to-school buying season. As recently as August, IDC had forecast a more modest 3.8 percent drop.

The market was even worse in the United States, contracting 12.4 percent compared to a forecast of negative 9.4 percent.

HP and Dell both underperformed in the bad global market. HP's PC shipments fell more than 16 percent. With Lenovo's 10 percent shipment gain, the Chinese OEM is challenging HP for the top spot in PC sales. Dell also saw shipments drop by 14 percent, according to IDC's figures.

"PCs are going through a severe slump," said Jay Chou, senior research analyst at IDC, in a statement. "The industry had already weathered a rough second quarter, and now the third quarter was even worse."

IDC chalked up the extremely bad quarter to economic concerns, PC market saturation, the diversion of PC spending to tablets and smartphones, and the wait for Windows 8, which becomes generally available on Oct. 26.

Even with Windows 8 in the mix for most of the fourth quarter, IDC isn't expecting a blockbuster holiday season. The firm's forecast calls for a "potential return to positive growth at the end of this year."

Posted by Scott Bekker on October 11, 2012 at 11:58 AM


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Reader Comments

Mon, Oct 15, 2012 ibsteve2u Commonwealth of Pennsylvania

A global policy of "beat on labor" in "the West" by transferring manufacturing and services provision to low wage (and low environmental regulatory cost) nations in order to transfer power and the flow of wealth into our financial sector and so increase the rate of wealth accumulation of the few in "the West" while selling products and services from offshore to consumers in "the West" had a built-in and quite easily discernible flaw: "Labor" is a synonym for "consumer". You hammer their jobs and suppress their wages, their incomes are constrained and even disappear. Computers come out of "disposable income"...over the last quarter, the big banks, hedge funds, and HNWIs have ramped up the private taxes they levy on gasoline and heating oil through the commodities markets way, way up; that is hammering "disposable income" in "the West". Americans - the entire "West" - is walking a thin line...when energy prices are artificially forced up, something else has to go. Right now, it is computers and other durable goods. If energy prices keep going up, it will be the cell phone bill. Next, the cable bill. Then, the mortgage. You've seen this before: 2006, remember? You should read http://articles.businessinsider.com/2011-11-02/markets/30349118_1_oil-companies-commodities-markets The reality is the Fed has some of the least effective tools for regulating consumer spending at their disposal. While my comment is not very "technical", it does apply to the sector...all sectors. People have to start paying attention to the financial sector, because it has been toying with you.

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