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PC Sales Fall in the First Quarter of 2011

The Q1 2011 numbers are in for one of the key indicators of the health of the IT industry -- PC sales -- and the diagnosis is not good.

IDC said this week that PC shipments contracted worldwide by 3.2 percent and in the United States by 10 percent. In discussing the U.S. results, IDC noted the strong gains through all of 2010 and called the drop "yet another inflection point in the rubber-band effect of the demand cycle that has become prevalent over the past two years."

Jay Chou, a senior research analyst with IDC, cast about widely in trying to find explanations for the worldwide drop. "While the consequences of events in the Middle East and Japan remain unclear, these will surely be factors that will influence short-term market performance for 2011," Chou said in a statement. Japan's year-over-year decline in shipments for the quarter was 16 percent.

"Long-term success will depend on hardware manufacturers being able to articulate a message that is beyond simple hardware specifications. 'Good-enough computing' has become a firm reality, exemplified first by Mini Notebooks and now Media Tablets. Macroeconomic forces can explain some of the ebb and flow of the PC business, but the real question PC vendors have to think hard about is how to enable a compelling user experience that can justify spending on the added horsepower," Chou said.

Among vendors, Acer Group had the toughest quarter, with shipments falling 16 percent worldwide and 42 percent in the United States compared to the year-ago quarter. Lenovo had double-digit growth worldwide (17 percent) and Apple and Toshiba both saw about 10 percent growth in the U.S. market. Dell's U.S. sales fell 12 percent, but strength in emerging markets limited its global losses to less than 2 percent. HP's sales fell about 3 percent globally and 2 percent in the United States.

According to IDC, early indications for Q2 also suggest PC shipments will be weak, but the market research firm is expecting a stronger second half of the year.

Posted by Scott Bekker on April 14, 2011 at 11:58 AM