PC Market Outlook a Mixed Bag After Q1 Results

Despite the continuing decline in PC shipments, the latest data from IDC and Gartner suggest the PC market is not doing as badly as previously forecast.

IDC on Thursday reported that 69 million PCs shipped over the first quarter of 2015, amounting to a 6.7 percent decline over the same period last year. While that's the lowest number of PC shipments recorded for any Q1 since 2009, the decline wasn't as sharp as the 8.2 percent drop that IDC had originally forecast last fall.

The better-than-expected performance came from a slower decline in the United States than other parts of the world, according to Rajani Singh, IDC senior research analyst for PCs. In the United States, 14.2 million PCs shipped in Q1, a 1 percent decline year-over-year, the firm said. The strongest segment of growth was portables, notably in new categories such as new Bing PCs, Chromebooks, PC-tablet convertibles and ultra-slim notebooks, according to IDC, which said desktop shipments were sluggish this quarter.

Gartner, for its part, said desktop shipments fell by double digits in the United States, but figures won't be available for another few weeks, according to analyst Mikako Kitagawa. Gartner, which said it had forecast moderate declines for the overall PC market this year, said PC shipments fell by 5.2 percent in Q1. However, Gartner is also forecasting moderate PC growth for the years to come.

"The PC industry received a boost in 2014 as many companies replaced their PCs due to the end of Windows XP support. But that replacement cycle faded in the first quarter of 2015," Kitagawa said in a statement. "However, this decline is not necessarily a sign of sluggish overall PC sales long term. Mobile PCs, including notebooks, hybrid and Windows tablets, grew compared with a year ago. The first quarter results support our projection of a moderate decline of PC shipments in 2015, which will lead to a slow, consistent growth stage for the next five years."

The release of Windows 10, expected sometime this summer, should boost PC shipments later this year, said IDC's Singh. "Windows 10 should be a net positive as there is pent-up demand for replacements of older PCs," she noted. "Only part of the installed base needs to replace systems to keep the overall growth rate above zero for rest of the year."

Kitagawa said in an e-mail that she doesn't anticipate the arrival of Windows 10 playing a significant role in an uptick of PC demand. "We don't expect Windows 10 will stimulate the demand, but will see shipment growth from supply side as manufactures will try to push the volume," she said. "If related marketing activities are visible enough, then it can draw buyers' attention, but it does not mean that it can increase the sales to the end users."

Both IDC and Gartner also noted that the No. 1 and No. 2 PC providers -- Lenovo and Hewlett-Packard, respectively -- were the only suppliers to grow sales during the quarter. IDC said Lenovo shipped 13.4 million PCs, a 3.4 percent increase over last year, giving it a market share of 19.6 percent. HP shipped just under 13 million systems, a 3.3 percent year-over-year increase, giving it a 19 percent share.

Dell, the No. 3 player, shipped 9.2 million PCs, a 6.3 percent decline, giving it a 13.5 percent share.

Smaller PC vendors, defined as "others" by both IDC and Gartner, accounted for a third of the market and collectively saw their shipments decline by 17.6 percent, according to IDC. That reduced their market share from 38.4 percent to 33.9 percent.

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.