The PC business: Decline continues in Q2

Personal computer shipments declined between 3% and 4% in the June quarter from the same period in 2016; one analyst doubts Windows 10 will help much.

Personal computer shipments declined between 3% and 4% in the June quarter from the same period last year, a pair of research firms said after releasing their latest diagnoses of the industry's health and well-being.

According to IDC, PC makers shipped a total of 60.5 million systems in the year's second quarter, a downturn of 3.3%. That was somewhat better than the firm's earlier forecast of a 4% decline for the period.

Rival Gartner, which also calculates shipments -- but uses different criteria for what is, and what is not, a personal computer -- pegged the year-over-year drop at 4.3% for the June quarter, adding that manufacturers shipped 61.1 million PCs in the three-month span.

More than 90% of the PCs were equipped with Microsoft's Windows; the remainder were Macs running macOS and a smattering of systems with Linux pre-installed.

Gartner pointed out that the year-over-year performance was the 11th consecutive quarterly decline, and the lowest volume for a three-month period since 2007 -- more signals, if any were necessary, that the business is mired in a depression of historic proportions and has made only feeble motions toward growth.

Both research firms blamed parts shortages, especially of memory chips and SSDs (solid-state drives), for pushing up costs, if not prices. Some manufacturers absorbed the increases, while others passed them along to buyers.

"In the business segment, vendors could not increase the price too quickly, especially in large enterprises where the price is typically locked in based on the contract, which often run through the quarter or even the year," Gartner analyst Mikako Kitagawa said in a statement.

IDC analyst Linn Huang painted the big picture for PCs. "The continued erosion of the consumer market is the drag on the industry," said Huang in an interview, referring to the extended depression. The only thing keeping the business from a complete collapse, Huang added, is the ongoing need for corporate PCs.

Huang asserted that migrations to Windows 10 would drive the commercial shipment numbers. Enterprises have until January 2020 to abandon Windows 7.

"Windows 10 is what is going to keep the [PC] market afloat for the next two to three years," said Huang. "But I don't think that any of that Windows 10 migration will be enough to offset the total decline on the consumer side."

But not every expert remains confident that Windows 10 would have an impact on PC shipments. Stephen Kleynhans, an analyst at Gartner, is in that camp.

"Are [enterprises] buying more PCs as they migrate to Windows 10? In a few cases, yes. But the vast number of customers have developed processes of taking existing PCs and bringing them up to Windows 10," Kleynhans said.

Instead, already-on-the-books purchasing plans are continued: Companies traditionally swap out a portion of their client systems, generally the oldest, each year.

Those new PCs, not surprisingly, are increasing left with Windows 10 rather than downgraded to Windows 7. But Kleynhans also related numerous instances of Gartner clients who are repurposing very old machines for Windows 10.

"They don't see the value of replacing the hardware right now," he said of firms that have been refitting five-year-old PCs for the new operating system.

Both IDC and Gartner agreed on how the world's PC makers rank in shipments for the June quarter. Each had Hewlett-Packard as the leader, with Lenovo, Dell, Apple and Asus following, in that order.

Both research firms said HP posted the highest growth rate for the quarter compared to the same period the year prior, and that Asus' and Lenovo's shipments declined by the greatest percentages.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Windows 10

More about AppleDellGartnerHPLenovoLinnLinuxMacsMicrosoft

Show Comments