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After Two Years of Decline, Worldwide PC Shipments Experienced Flat Growth in Second Quarter of 2014, According to Gartner

PC Industry Experiences Mixed Results as Mature Markets Return to Growth, While Emerging Market Shipments Continue to Decrease

After eight quarters of declining shipments, worldwide PC shipments experienced flat growth in the second quarter of 2014, according to preliminary results by Gartner, Inc. Worldwide PC shipments totaled 75.8 million units in the second quarter of 2014, a 0.1 percent increase from the second quarter of 2013.

“While the worldwide PC market stopped two years of declining shipments in the second quarter, there were mixed results, as stabilization in developed markets was offset by a decline in emerging markets,” said Mikako Kitagawa, principal analyst at Gartner. “The PC industry in emerging markets has been impacted by the allure of low-cost tablets. These low-cost tablets continue to take spending from new PC units, meaning that it will take more time for PC sales to stabilize in emerging markets.

“The PC market's installed based has been declining as buyers switched to tablets and smartphones for entertainment and social media consumption. The 2Q14 results suggest that the consumer installed base restructuring peaked during 2013. We are seeing a slowdown in premium tablet sales, which have already penetrated a large number of households. PCs are now growing off a smaller installed base of newer devices, with more engaged users. Therefore, we expect to see slow, but consistent, PC growth. While the end of support for Windows XP drove some of the sales in developed markets, it is the underlying business replacement cycle that will stabilize the market.”

Lenovo extended its lead as the leader in worldwide PC shipments, as its worldwide market share increased to 19.2 percent (see Table 1). Lenovo’s PC shipments grew by double-digits in all regions except Asia/Pacific. Lenovo’s shipment growth in Asia/Pacific was still faster than the regional average.

Table 1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 2Q14 (Units)


Company

2Q14 Shipments

2Q14 Market Share (%)

2Q13 Shipments

2Q13 Market Share (%)

2Q13-2Q14 Growth (%)

Lenovo

14,518,435

19.2

12,608,687

16.7

15.1

HP

13,404,100

17.7

12,267,924

16.2

9.3

Dell

10,096,619

13.3

8,973,369

11.9

12.5

Acer Group

5,968,766

7.9

6,415,228

8.5

-7.0

ASUS

5,222,898

6.9

4,631,613

6.1

12.8

Others

26,552,908

35.0

30,804,080

40.7

-13.8

Total

75,763,725

100.0

75,700,902

100.0

0.1

Note: Data includes desk-based PCs and Notebook PCs and Ultramobile Premium. Ultramobile Premium includes x86 tablets equipped with Windows 8, but excludes Chromebooks and other tablets.

Source: Gartner (July 2014)

HP achieved its fastest global PC shipment increase in the last four years (since 2Q10). The company has put a lot of effort into restoring its PC business, including the review of the product family and stock keeping units (SKUs), as well as revitalizing the channel partner program. HP did very well in EMEA with 21 percent shipment growth, securing the top spot in the region.

The second quarter of 2014 was the second consecutive quarter of double-digital growth for Dell’s global PC shipments. Dell benefited from strong business PC demand. The company also did particularly well in Asia/Pacific. Dell’s shipments grew in all regions, except Latin America, but Dell’s shipment decline was less than the regional average.

In the U.S. market, PC shipments totaled 15.9 million units in the second quarter of 2014, a 7.4 percent increase from the second quarter of last year. This was the second consecutive quarter of year-on-year shipment growth. Both desktop and notebook PCs exhibited an increase in shipments.

“The consumer PC market also started picking up in the U.S. The availability of affordable, thin and light notebooks have drawn consumers’ attention,” Ms. Kitagawa said. “Touch enable devices are also widely available with decreasing price premiums compared to a year ago. The price premium is low enough for mainstream consumers to spend the extra money for the additional functionalities, such as touch.”

Four of the top five vendors in the U.S. market experienced double-digit growth (see Table 2). HP was the market leader, accounting for 27.7 percent of PC shipments.

Table 2
Preliminary U.S. PC Vendor Unit Shipment Estimates for 2Q14 (Units)


Company

2Q14 Shipments

2Q14 Market Share (%)

2Q13 Shipments

2Q13 Market Share (%)

2Q13-2Q14 Growth (%)

HP

4,414,831

27.7

3,822,666

25.8

15.5

Dell

4,133,740

26.0

3,681,725

24.9

12.3

Lenovo

1,822,979

11.5

1,515,562

10.2

20.3

Apple

1,681,600

10.6

1,704,397

11.5

-1.3

Toshiba

1,021,275

6.4

861,795

5.8

18.5

Others

2,843,271

17.9

3,228,987

21.8

-11.9

Total

15,917,695

100.0

14,815,131

100.0

7.4

Note: Data includes desk-based PCs and Notebook PCs and Ultramobile Premium. Ultramobile Premium includes x86 tablets equipped with Windows 8, but excludes Chromebooks and other tablets.

Source: Gartner (July 2014)

PC shipments in EMEA totalled 22.5 million units in the second quarter of 2014, an 8.6 per cent increase from the same period last year (see Table 3).

The EMEA PC market has returned to strong growth after very weak growth (0.3 per cent) during the first quarter of 2014 and eight consecutive quarters of decline prior to that.

 "As we said earlier this week, 2014 is on pace to be a year of relative revival in the global PC market and that change is most pronounced in Western Europe," said Ranjit Atwal, research director at Gartner. "In EMEA during the second quarter we saw a continued shift to ultramobiles at the expense of traditional notebooks." In addition, PC sales in EMEA continued to be driven by an increase in professional spending. This is in part due to organisations upgrading from Windows XP as official support from Microsoft ended.

Hybrid ultramobiles, such as two-in-one devices, are becoming more attractive — with increased usability at lower price points. Sales of premium tablets (such as the iPad), which compete with PCs, are also slowing as users move to tablets with lower functionality and price points; some users will replace premium tablets with two-in-one PCs, bringing spend back to the PC market.

In emerging European markets, the story was different, with two distinct trajectories seen during the quarter. "In Eastern Europe the PC market stabilised and volumes improved marginally year-on-year, driven by a slightly improved economic situation," said Isabelle Durand, principal research analyst at Gartner. "However, the situation in Russia and Eurasia remains challenging, due to the political and economic situation in Ukraine." The ongoing conflict resulted in a steep decline in the PC market in Ukraine, and businesses have delayed many PC purchases in Russia until, at best, the second half of 2014.

In EMEA, HP retained the No. 1 position and had a strong quarter. Lenovo held on to the second spot, marking eight consecutive quarters of double-digit growth. Lenovo PC shipments grew 52 per cent in the second quarter of 2014 thanks to growing presence in the consumer PC market. Asus also performed well and currently leads the hybrid PC market, while Acer revitalised its business by introducing new products — such as the Aspire Switch 10, a detachable hybrid.

The others category declined steeply losing 10 per cent share as many smaller players saw their market share decline and others have exited the PC market altogether. Over the last few years, many PC vendors have lost the economies of scale battle and were unable to maintain sufficient margins.

Table 3
Preliminary EMEA PC Vendor Unit Shipment Estimates for 2Q14 (Units)


Company

2Q14 Shipments

2Q14 Market Share (%)

2Q13 Shipments

2Q13 Market Share (%)

2Q14-2Q13 Growth (%)

HP

4,607,719

20.5

3,813,090

18.4

20.8

Lenovo

3,977,997

17.7

2,624,649

12.7

51.6

Acer Group

2,801,100

12.4

2,287,617

11.0

22.4

ASUS

2,247,239

10.0

1,743,345

8.4

28.9

Dell

2,134,639

9.5

1,979,895

9.6

7.8

Others

6,745,993

30.0

8,274,257

39.9

-18.5

Total

22,514,687

100.0

20,722,853

100.0

8.6

Note: Data includes desk-based PCs and mobile PCs, including x86 tablets equipped with Windows 8, but excludes Chromebooks and other tablets. All data is estimated based on a preliminary study. The statistics are based on the shipments selling into channels.

Source: Gartner (July 2014)

In Asia/Pacific, PC shipments totaled 24.6 million units in the second quarter of 2014, a 9.5 percent decrease from the second quarter of 2013. Despite the decline in shipments, there are some signs of stabilization, with minimal declines and flat growth in mature Asia/Pacific countries and Chine. However, the low end of the notebook PC market continues to be challenged by the popularity of phablets and voice connected tablets, especially in smaller cities where some lower income groups prefer a larger screen phone as their only device for communication and access to the Internet.

These results are preliminary. Final statistics will be available soon to clients of Gartner's PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe. Additional research can be found on Gartner's Computing Hardware section on Gartner's website at http://www.gartner.com/it/products/research/asset_129157_2395.jsp

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