News

Gartner: Tablets To Blame for PCs' Poor Q1 Numbers

• By David Nagel
• April 15, 2011

Confirming earlier predictions, a new preliminary report released this week by market research firm Gartner indicates that tablet computers such as Apple's iPad and other alternative computing devices have cut into PC sales.

The report, "Preliminary PC Market Results, Worldwide, 1Q11," found that U.S. shipments of traditional PCs -- desktops, laptops, netbooks and workstations -- declined significantly during the first quarter of 2011. Worldwide shipments were also sluggish, declining by 1.1 during the period and bucking Gartner's earlier forecast of 3 percent growth for the quarter.

Gartner's Q1 findings mirror those of IDC, which, as reported earlier this week, found in its own report that worldwide PC shipments fell by 3.2 percent.

While the first quarter of any year has historically been a weak one for PC sales, the dip in 2011 may be more than just a seasonal blip.

"Weak demand for consumer PCs was the biggest inhibitor of growth," said Mikako Kitagawa, principal analyst at Gartner, in a statement released to coincide with the findings. "Low prices for consumer PCs, which had long stimulated growth, no longer attracted buyers. Instead, consumers turned their attention to media tablets and other consumer electronics. With the launch of the iPad 2 in February, more consumers either switched to buying an alternative device, or simply held back from buying PCs. We're investigating whether this trend is likely to have a long-term effect on the PC market."

Had it not been for stronger sales in professional markets, driven by ongoing replacement cycles, the worldwide slump would have been even deeper, according to the researchers.

Overall worldwide PC shipments were 84.25 million for the quarter compared with 85.18 million in the same period in 2010.

By comparison, for calendar year 2011, Gartner forecast worldwide tablet sales at 67.78 million -- still a fraction of traditional PC sales, but an increasingly significant fraction. Overall volume of worldwide tablet purchases will grow substantially over the next five years, from just 17.61 million in 2010 to 294.09 million in 2015, according to a separate Gartner report released earlier this week.

In the United States, the decline in traditional PC sales was much more drastic, with an overall 6.1 percent slip, according to Gartner. (IDC's report measured the U.S. decline to be 10 percent.) According to Gartner, the slump in the United States was attributable to the hype around handheld tablets like the iPad, as well as budget constraints in the public sector.

"As with the worldwide market, the U.S. PC market was affected by the hype surrounding media tablets. This was the third consecutive quarter of mobile PC shipment declines in the U.S.," Kitagawa said. "The U.S. professional PC market showed steady growth across all sectors. However, the public sector showed more than the normal seasonal weakness due to budgetary issues."

Total shipments of desktops, workstations, laptops and netbooks in the United States in the first quarter were off by more than a million --16.11 million in Q1 2011 compared with 17.16 million in Q1 2010.

Aside from Japan, which experienced major catastrophes late in the first quarter, the United States seemed to experience the worst decline in PC sales. Europe, the Middle East and Africa (EMEA) declined 2.8 percent to 26.1 million units; Latin America increased 5.4 percent to 8.1 million units; and Asia/Pacific increased 4.1 percent to 28.2 million units shipped in the quarter. Japan's decline in the quarter was 13.1 percent to 4 million units.

Big Manufacturers Suffer; Apple, Toshiba, Lenovo Up
In the United States, Apple and Toshiba both saw positive growth. Apple cracked the top 5 with domestic unit sales of 1.49 million in the first quarter (not counting its iOS devices), up 18.9 percent over 2010 sales. The company ended the quarter with a 9.3 percent market share, up two points from Q1 2010.

No. 4 manufacturer Toshiba also saw double-digit growth domestically, with 1.67 million units, up 10.9 percent from Q1 2010's shipments. The company ended the quarter with a 10.4 percent market share, up 1.6 points from Q1 2010.

On the down side, No. 2 Dell and No. 3 Acer both slipped by double-digit percentages, while No. 1 HP slipped by single digits, managing to increase its overall market share in the process. Dell fell 12.1 percent in Q1 2011 with 3.59 million units sold in the United States, losing 1.5 points in market share and ending at 22.3 percent. Acer's sales fell 24.9 percent to 1.83 million units in the quarter, ending with an 11.3 percent market share, down from a 14.2 percent share in Q1 2010.

HP held on to the top slot in the United States and worldwide. In the United States, HP saw sales of 4.21 million units, a decline of 3.5 percent, while its market share rose a slight 0.7 points to 26.2 percent. However, HP's worldwide market share of 17.6 percent was off 0.4 points from the previous quarter on global unit shipments of 14.8 million, down 3.4 percent from Q1 2010.

Likewise, Acer and Dell declined on the worldwide PC scene. No. 2 Acer dropped 12.2 percent to 10.89 million units, ending with a 12.9 percent market share (compared with 14.6 in Q1 2010). No. 3 Dell's unit shipments fell a more modest 2.2 percent to 9.98 million. The company's market share was off just 0.1 points, ending at 11.9 percent.

The winners in global unit sales were No. 4 Lenovo and No. 5 Toshiba. (Apple didn't make the top 5 in global PC shipments.) Lenovo was up 16.6 percent with 8.14 million units and a 9.7 percent share of the market, up 1.5 points over Q1 2010. Toshiba climbed 5.3 percent to 4.82 million units in the quarter and a market share of 5.7 percent, up 0.3 points over Q1 2010.

The full report, "Preliminary PC Market Results, Worldwide, 1Q11," is available now. Details can be found here.