Gartner analysts suspect PC slump has 'bottomed out' despite Q4 decline

Gartner analysts suspect PC slump has 'bottomed out' despite Q4 decline

Summary: Despite some optimism here and there, Gartner also labeled 2013 as "the worst decline in PC market history, equal to the shipment level in 2009."


It's a new year, but still the same old story for the PC industry -- or is it?

Gartner came out with its fourth quarter recap on Thursday after the bell, and at first glance, the same trends all seem to be in place.

Lenovo and Hewlett-Packard are up at the top with the gap between the two are widening. PC shipments continued to decline worldwide too.

Marking the seventh consecutive quarter of decline, worldwide PC shipments totaled 82.6 million units in Q4, down by 6.9 percent from the fourth quarter of 2012.

Nevertheless, analysts look optimistic for the industry going into the 2014 anyway.

Gartner principal analyst Mikako Kitagawa suggested in the report that the market research firm believes "markets, such as the U.S., have bottomed out as the adjustment to the installed base slows.

But don't expect anything to go back to the normal of roughly two years ago. Kitagawa warned that smartphones and tablets will continue to make a dent in PC shipment and sales figures, especially thanks to consumer trends in emerging markets.

"In emerging markets, the first connected device for consumers is most likely a smartphone, and their first computing device is a tablet," Kitagawa noted. "As a result, the adoption of PCs in emerging markets will be slower as consumers skip PCs for tablets."

Lenovo and Dell were the only PC vendors in the top five to see market share growth on an annual basis during the holiday quarter.

Lenovo was found to have showed strong growth in all regions, except one: Asia/Pacific. Coincidentally, the PC maker's home country of China continues to be a weak spot, as described by Gartner.

Stateside, the PC slump was larger with a 7.5 percent decline to just 15.8 million units shipped in Q4.

HP continues to reign supreme, despite a 10.3 percent decline in shipments year-over-year. Apple, in third place on the domestic PC vendor charts, saw a huge increase in market share: 28.5 percent more, year-over-year.

For the year overall, PC shipments were 315.9 million units, a 10 percent decline from 2012. Quite simply, Gartner labeled it as "the worst decline in PC market history, equal to the shipment level in 2009."

Chart via Gartner

Topics: PCs, Hardware, Hewlett-Packard, Lenovo, Tech Industry

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  • Cheap devices are in

    Its a common thread that PC sales are slow and so is Mac sales. Meanwhile tablets and small devices like smartphones are selling well. Even Chromebooks seem to have found their niche. The trending seems to be that many consumers have found cheaper replacements to PC's that also are more portable and less expensive. They have ignored some of the negatives of these devices like less repair friendly, typically have shorter support lifespans and generally are married to a app store ecosystem. I not only think price hurt PC sales, but also Windows 8 did nothing to revive it. Mac's on the other hand have been cannibalized by iPad sales, people who simple use smartphones and those who have moved from a Mac to a cheaper Android tablet. When you look at Amazon's biggest notebook sellers, they were mostly cheaper devices. People are realizing technology has advanced to a point where cheap devices do not have as many compromises.
    • Did you read the article

      They only had US numbers for Apple but those numbers showed them way up, not down.
      • Did you read the article?

        It doesn't show Apple's numbers up. It shows their "market share" (really not market share, but shipment share of the market) increasing, but not necessarily their shipments. They avoided the discussion of shipments. We don't have the real numbers because the reporter did a poor job. But lets look at a fictitious scenario so you can understand how numbers work.

        Apple Shipments 2012 - 10,000 , Apple Shipments 2013 - 9,000
        Total Shipments 2012 - 100,000 , Total Shipments 2013 - 80,000
        Apple Mkt Share 2012 -%10 , Apple Mkt Share 2013 - 11.25%

        so, Apple shipments slid 10% year over year, but their share of shipments increased 1.25%.

        Without real numbers from this reporter, we know nothing.
        • Which is a perfect example...

          of why market share is terrible metric.
    • Actually, PC prices are 2 to 3 times less than for high-end smartphones,

      and are cheaper than the higher-end tablets.

      Remember that, a PC is kept some 5 - 6 years, and oftentimes longer, while a smartphone that costs between $500 - $800 has an "ownership" lifespan of about 1-2 years, which would bring the price of a good smartphone to about $1500 to $2400 for the 5-6 years that a PC is kept. Then, a smartphone needs a wireless plan, which would bring the total price of ownership for the 5-6 UP about $5000 - $10,000. When one considers the total cost of ownership of a high-quality smartphone for the 6 years, we're talking an amount close to 10 times the price of a good PC.

      So, no matter how you put it, smartphones are many times as expensive to own as any PC (or even a Mac).
      • But most PCs are connected to the internet

        So you also have to factor in the $50/month or so that most people pay their internet provider as well.
        • The point is that, a PC does NOT need the internet in order to be work or

          or be useful, and even when the internet is involved, it can be shared (ever heard of wi-fi?) with many other devices (I have 4 PCs at home that are sharing my wi-fi), and I also have 2 smartphones that use it, and one tablet that uses it too, and when my son and daughter visit, they too share my broadband connection.

          With a smartphone, you end up paying $45 or more, and if I add another phone to my service, it can be another $45 or something less, but not that much less. My daughter and husband pay $110/month, for the "privilege" of talking and texting and a bit of Facebook. I know a bunch of other people who pay even more than that for getting the whole family on a family plan. My niece pays $150 per month, and still pays for her internet service.

          Sorry but, the costs for internet via cable is not even remotely as expensive as cell-plans for smartphones. And, yeah, I know people can get cell plans for as low as $35/month, but, you get what you pay for, and my son discovered that very quickly, and had to move to a bit more expensive plan.

          With my cable service, I'm getting cable TV and high-speed internet and wired-phone, all for $89, and that's the service which I can share my wi-fi with the rest of my family.

          Practically speaking, my internet service is nowhere as expensive as it is with smartphones. And, the "practical" lifespan of a smartphone is still a lot less than for a PC. Even if I was paying $50/month for internet, it would still end up costing a lot less in a year than the simple and less useful smartphone.
      • You must compare starting with average price

        That must be $230 for an android smartphone and maybe $600 for a PC.
        Average lifespan for smartphones is 21 months in the US, globally should be more, let's say 2 years.
        Smartphones with a data plan are probably much better than a PC without a data plan - it's not comparable.
        In the end they are different devices, if you ask 100 people if they want to live with a PC and without any form of mobile phone, or with a smartphone and no pc, maybe 70 or more will choose the smartphone. For average people a smartphone is a more desirable item.
        • I can get a very good PC for $300-$400, and it will last me 5-6 years,

          easily, while the smartphone's practical lifespan is between 1 and 2 years, and most good smartphones cost a lot more than the $230 you mention.

          The pure and simple fact remains that, in the 6 years that a PC would still be useful, most people will have gone through 2-3 (perhaps 4) smartphones.

          Smartphones can be bought cheaply when they're part of a package which includes the smartphone and service, but then, you're still paying for the price of the smartphone within the plan. However, the phones which most people have in mind, and which they use, are the iPHones and the better models from Samsung, and those don't "just" cost a measly $320. But, like I said, even a $320 smartphone will end up costing more than a very good PC, since that $320 could end up being $320 times 3, for six years, which would bring the ownership of the smartphone alone to $960, which is still a lot more than a very good i5 or even i7 processor PC. Imagine that: a PC which is many times as powerful as any smartphone, and many times more useful, coming in at a price much lower than the smartphone equivalent.

          No matter how you might want to argue the point, the fact remains that, owning a PC is a lot less costly than owning a smartphone, and it's still many times more useful.
          • Your reasoning was ok

            But you can't honestly do your math using the most expensive phone with the cheapest pc.
            In the end they are 2 different things and cost comparison is not an easy task.

            I can still argue that there are laptops costing over $2500, office licenses are expensive, internet connections are not free for pcs - maybe cheaper, probably in five years a laptop will need an expensive new battery, ...
            And 1 to 2 years averages 1.5. My 21 months for the US don't come out of my head, it's a fact.
  • Gartner's numbers seem incomplete

    I'm not sure what to make of Gartner's numbers.

    The following is an excerpt from the article you are taken to by the above link:

    "I believe Surface 2 and Surface 2 Pro sales were also strong. Microsoft seems to have not only cleared out its original Surface RT and Surface Pro inventory but also sold quite a few of the newer models.

    My estimates are sales of:

    Surface RT 2,000,000
    Surface 2 3,000,000
    Surface Pro 1,000,000
    Surface Pro 2 1,500,000

    Data from Chitika seem consistent with these estimates showing Microsoft's post holiday tablet share increasing from 1.8% to 2.3% of the web traffic in the United States and Canada."

    My guess is that Gartner's numbers do not include Windows tablets, and are hence misleading. The fact that the Asus T100, the Dell Venue 8 Pro, and other Windows tablets were sold out repeatedly over the last quarter, further casts doubt on the completeness of the Gartner numbers, in my opinion.
    P. Douglas
    • The Surface does not have that much of the Internet's traffic, no way

      I know for a fact that Surface can't be distinguished from other touch Windows 8 devices by user agent. That's traffic for all touch Windows 8.... everyone's tablets and convertibles.
      • Your facts appear to be wrong

        The conversation at the following link says otherwise:
        P. Douglas
        • Um, actually, no, they demonstrate my correctness

          the new Lumia tablet would have exactly this User agent. Might want to read your own link.
          • Nope. You were wrong.

            I don't know exactly how Chitika determines the percentage device browsing share of Samsung, Google, and MS Surface devices, but at least it is clear that browsers can distinguish between different Windows 8 / RT devices:

            P. Douglas
      • I don't know about that

        I'm a software dev and where I work almost half the devs have a Surface Pro. I consult at a lot of places and a good number of those developers and office workers use the Surface. Its a tablet that runs their internal office applications. These are typically custom .Net WPF applications that cost the company millions to build and maintain. They are not about to rewrite them. Its way cheaper to buy a Surface Pro to use as a tablet. Its Windows, so the IT department doesn't need any more infrastructure, its a tablet so people can take them on the road easily, and it can be a laptop if they need to write huge docs or edit Excel docs. I'm not a Surface fan, I don't really like them, I'd rather use a laptop, but companies are buying hundreds of them at a time.
        A Gray
        • I believe in that

          But most of surface pro purchases are replacing a traditional pc laptop. While it's good for Microsoft devices strategy, it's not making windows share grow much bigger.
          The side effect - others OEMs don't like and maybe that's part of the reason most of them are pushing chromebooks and android "PCs".
          • The surface purchases also replace potential tablets sales too.

            It is a result of PCs changing form factors again like when Desktops evolved into Laptops. Now some portion of the laptop market is going to transform into tablets.

            That is why so many stats like this have a hard time classifying where to place windows hybrids and tablets, because they can easily fit into tablets or computer categories. I'm curious to see how stats like this evolve in the next year or two.
  • There had to be a bottom somewhere

    people may not need PCs as often as before, and can afford to let their old ones last longer. But the PC is still the one device that can get complex tasks done. Useful for work - at home and at work. There had to be a floor somewhere.
  • Microsoft is under seige...

    Microsoft needs to wake up and realize that it has no friends left. The traditional PC OEMs would abandon Windows tomorrow if they could. Fortunately for Microsoft, they can't... which gives Microsoft a little bit of time to get its act together (but not much time). Microsoft has about 100 knives in its back... whether they deserve them or not depends who you ask. But either way, it's time to fight back. The only OEMs that seem to have a little bit of loyalty left for Microsoft are Lenovo and Dell. HP practically declared itself an enemy this year (but look how that's turning out for HP).