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PC sales slump as smart devices take the strain

Worldwide PC shipments reached 89.8m units in the fourth quarter of 2012, down 6.4 per cent from the same period last year, according to new research from IDC, far worse than the expected 4.4 per cent fall. So much for Windows 8, Microsoft’s latest operating system, which was released in Q4 with much fanfare.

According to IDC, the fourth quarter of 2012 marked the first time in more than five years that the PC market has seen a year-on-year decline during the holiday season. Not even the rush to clear out old Windows 7 inventory helped, as this effect was confined to Q3 and had not noticeable impact on Q4.

The continuing depressing economic climate isn’t helping sales. But it’s not the only reason. Increasing sales of smartphones and tablets are taking market share away from the PC sector – either directly, or because there are still many questions in the minds of potential buyers about the use of touch on Windows PCs against tablets, resulting in delays in commercial spending on PCs. As Jay Chou, senior research analyst with IDC, explains:

“Lost in the shuffle to promote a touch-centric PC, vendors have not forcefully stressed other features that promote a more secure, reliable and efficient user experience. As Windows 8 matures, and other corresponding variables such as Ultrabook pricing continue to drop, hopefully the PC market can see a reset in both messaging and demand in 2013.”

The US market struggled in Q4, dropping 4.5 per cent in the quarter and contributing to a decline of 7 per cent for the full year 2012. Despite a generally weak performance, some leading brands managed do to well relative to the market, with HP, Lenovo, Asus and Samsung among the top performers. David Daoud, research director with IDC US, said that consumers’ expectations simply weren’t met:

“Consumers expected all sorts of cool PCs with tablet and touch capabilities. Instead, they mostly saw traditional PCs that feature a new OS (Windows 8) optimized for touch and tablet with applications and hardware that are not yet able to fully utilize these capabilities.”

HP held on to its top spot in IDC’s worldwide ranking, and an aggressive push for Windows 8 volume helped it make gains in Asia/Pacific and the US, although it struggled in Europe. It shipped 58m units during 2012, down 6.7 per cent on 2011. Its overall market share fell slightly from 17.1 per cent to 16.5 per cent.

Lenovo stole second spot from Dell, outpacing the market with growth of over 19 per cent for the year. Its shipments for 2012 climbed to 52m, whereas Dell’s shipments fell 12 per cent to 38m. Acer held on to fourth spot with 33m sales, although ASUS moved to close the gap with annual global sales of 24m. In total, IDC calculates that 352m PCs were shipped in 2012, down 3.2 per cent on the year.

IDC’s definition of ‘PCs’ include desktops, portables, mini notebooks and workstations – they do not include handhelds, tablets or x86 servers.

In December, IDC updated its forecasts for the tablet market, suggesting that worldwide shipments will likely be 122m. It believes that the market will continue to grow in 2013, reaching 172m units shipped by the year end. By 2016, this should reach 282m – tantalisingly close to PC volumes… It also believes that iOS will fend off the Android challenge during the whole of this four year period, ending 2016 with a 50 per cent share against Android’s 40 per cent.

IDC still expects global smartphone volume in the fourth quarter of 2012 to reach 224.5m units, representing a 40 per cent year-over-year growth. For the whole of 2012, smartphone shipments are forecast to grow 45 per cent to 717.5m units.

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