Global PC Market Contracts in the First Quarter, But Swaths of Growth Remain, According to IDC
FRAMINGHAM, MA – April 13, 2011 – A myriad of factors contributed to the first contraction in the worldwide PC market since the end of the recent recession. Global PC shipments declined 3.2% during the first quarter of 2011 (1Q11) compared to the same time last year, according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker. Although the forecast for the quarter was already conservative — IDC expected a mere 1.5% growth in shipments — a steady but still cautious business mentality and waning consumer enthusiasm persisted. A spike in fuel and commodity prices and the disruptions in Japan added to the mix, further dampening a market struggling to maintain momentum.
The PC market showed clear indications that after more than a year of impressive purchases, frugality tinged with a shift of focus will be the norm for the time being. Despite promising economic sentiments, mature regions appear to be more focused on necessary replacements as a relative dearth of compelling reasons were present to buy secondary PCs. Emerging markets fared better due to lower saturation rates, but also slowed somewhat with Asia/Pacific (excluding Japan) slowing to a 5.6% growth and China continuing to cool off after a momentous 2010.
"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," said Jay Chou, senior research analyst with IDC's Worldwide Quarterly PC Tracker. "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."
"The U.S. and worldwide PC market continues to work through a difficult period that we expect will continue into next quarter, but will start to improve in the second half of the year," said Bob O'Donnell, program vice president, Clients and Displays. "Slower than expected commercial growth in the first quarter failed to offset the ongoing challenges in the consumer market. While it's tempting to blame the decline completely on the growth of media tablets, we believe other factors, including extended PC lifetimes and the lack of compelling new PC experiences, played equally significant roles."
— United States — After strong gains for most of 2010, the market has now
seen yet another inflection point in the rubber-band effect of the
demand cycle that has become prevalent over the past two years. Demand
fell back as buyers shifted focus and shipments declined over 10%
compared to last year.
— Europe, Middle East, Africa (EMEA) — PC shipments in the EMEA region
contracted further than expected in the first quarter, in part the
result of continued softness in the consumer space. The business segment
also remained cautious, which, combined with sustained high inventory
levels in the retail and distribution channel, constrained most vendors'
"sell in" levels this quarter. Growth was expected to remain constrained
after a difficult year-on-year comparison and the growth achieved in
1Q10, but demand failed to sustain stronger levels to stimulate higher
"sales in" levels in March. The additional impact of the recall of Sandy
Bridge systems already in the channel only affected small volumes, but
had an adverse impact in terms of cancelled and delayed orders and
contributed to some additional disruption.
— Japan was slightly below forecast with a year-over-year decline in
shipments of 15.9%. Despite an already conservative forecast that
reflected a relative lack of public sector projects, the region
struggled in part due to supply constraints and the effect of the
earthquake which affected much of March.
— Asia/Pacific (excluding Japan) — Shipments increased only 5.6% in 1Q11,
similar to the trend in the fourth quarter of 2010. Despite the Lunar
Year season, China failed to reach double-digit growth. However, other
major markets helped to pick up some of the slack.
Vendor Outlook –
— HP declined 2.8% compared to the first quarter of 2010. The vendor
managed to outperform most markets, taking advantage of surging demand
in Latin America, but struggled in Asia/Pacific (excluding Japan).
— Dell experienced disappointing sales in its key markets, including
lackluster consumer demand in the U.S. and tepid business volume, but
the decline was offset by significant strides in emerging markets,
including major wins in PRC. The vendor slightly outperformed the market
with volume declining at 1.8%.