Global PC shipments grew 7.6% in 3Q

Softness in consumer PC demand slowed shipment growth, says Gartner HP remained in the top worldwide position

Worldwide PC shipments surpassed 88.3 million units in the third quarter of 2010, a 7.6 percent increase from the third quarter of 2009, according to preliminary results by Gartner, Inc.

These third quarter results were below Gartner’s earlier market outlook. Gartner had expected third quarter PC shipments to grow 12.7 percent.

“The major growth inhibitor in the third quarter of 2010 was softness in consumer PC demand in the U.S. and Western Europe. The third quarter historically is a strong consumer quarter, led by back-to-school sales,” said Mikako Kitagawa, principal analyst at Gartner. “Consumer mobile PC demand, driven by low-priced notebooks, including mini-notebooks, slowed after very strong growth the past two years.”

“Media tablet hype around devices such as the iPad has also affected consumer notebook growth by delaying some PC purchases, especially in the U.S. consumer market. Media tablets don’t replace primary PCs, but they affect PC purchases in many ways,” Ms. Kitagawa said. “At this stage, hype around media tablets has led consumers and the channels to take a ‘wait and see’ approach to buying a new device.”

HP remained in the top worldwide position (see Table 1), but it experienced a slight decline in shipments in the quarter. HP experienced a 20 percent decline in shipments in Asia/Pacific as the company put a higher priority on profits in the region. In the U.S., the company was impacted by weak consumer growth.

Acer experienced a shipment decline of 1.7 percent in the third quarter. Dell showed solid growth across most regions. Overall, Dell benefited from the professional PC market refresh, but North America showed disappointing results. Lenovo showed the strongest growth among the top five vendors worldwide. The professional PC market helped boost Lenovo’s growth in the U.S. and EMEA.

In the U.S., PC shipments surpassed 17.6 million units in the third quarter of 2010, a 2.2 percent increase from the third quarter of 2009. Consumer mobile PC shipments were the weakest in the last several years.

“The weak back-to-school sales were not because students held off on PC purchases, but because nonstudent buyers, who normally are lured by massive back-to-school promotions, stayed away from PC purchases,” Ms. Kitagawa said. “These buyers were influenced by media tablet introductions, as well as the still-gloomy economy, since these buyers do not have an immediate need to purchase a PC.”

In the U.S. market, HP was the No. 1 vendor in the third quarter of 2010 as its shipments increased 2 percent (see Table 2). HP was impacted by consumer PC demand. Dell also had a challenging quarter. Apple had another strong quarter. Increasing traffic to Apple, associated with the iPad release (iPads are not included in Gartner’s PC shipment statistics), as well as iMac and Mac Pro refreshes, contributed to the growth.

In the third quarter of 2010, PC shipments in EMEA totaled 27.3 million units, an increase of 7.3 percent from the third quarter last year (see Table 3).

 “The single-digit growth experienced in the third quarter signals a slowdown in the EMEA PC market after a very strong first half of 2010. Undoubtedly consumers and businesses are delaying PC purchases as device choice broadens, and as they await attractive seasonal offerings in the fourth quarter of 2010,” said Ranjit Atwal, Research Director at Gartner.

The emerging markets of Central Eastern Europe (CEE) and Middle East and Africa (MEA) saw better growth but not enough to offset the weakness of the PC market in Western Europe.

PC shipments into the channel significantly exceeded PC demand in the second quarter of 2010, resulting in significant inventory leading into the third quarter of 2010. Many leading PC vendors spent most of the third quarter clearing inventory, but were unable to use price reductions to stimulate demand, as their margins were constrained by increased component costs and the weaker euro in the first half of 2010.

 The expected upturn in the professional market was slower than expected, as the weak economic climate further dampened spending, even on aging PC hardware. The ongoing spending reviews of most public institutions has further slowed PC spend in the third quarter of 2010, and Windows 7 deployment is now perceived to be moving into 2011.

While causing minimal cannibalisation of the PC market, media tablets have certainly caused delays of PC purchases among consumers in Western Europe. “At this stage, the hype around the iPad and other media tablets has led the consumers to consider the tablet at least as a complimentary device, if not a substitute. Looking forward, as consumers beyond the early adopters consider media tablets, competition for already constrained disposable consumer spending will rise. Further delay in PC purchases is increasing the risk of slower growth of mature consumer mobile PC markets in 2011,” said Atwal.

“For the first time both leading vendors Acer and HP failed to perform ahead of the market average in the third quarter of 2010,” said Atwal. “Acer not only performed below the market average but saw a decline as inventory clearance inhibited growth.” “HP suffered more on the commercial environment as professional notebooks performance slowed against expectations.”

The vendors outside the top five continued to outperform the market. Lenovo’s very strong performance in the consumer market across all regions helped the vendor move into the top five for the first time, displacing Toshiba. Lenovo had the strongest growth rate among the top five vendors in EMEA in the third quarter of 2010, and saw its shipments grow 61.3 percent year-on-year.

In Asia/Pacific, PC shipments reached 29.7 million units in the third quarter of 2010, a 10.5 percent increase from the third quarter of 2009. In the emerging markets, mobile PC demand in the consumer segment continued to grow unabated as mainstream notebooks continue to appeal to first-time PC buyers as well as those substituting notebooks for desktops. PC shipments in China in the third quarter of 2010 held steady at 62 percent of all PCs shipped in Asia/Pacific, growing 11.3 percent over the same quarter last year.

Latin American PC shipments totaled 8.2 million units in the third quarter of 2010, a 9.9 percent increase from the third quarter of 2009. Back-to-school PC sales in Latin America were sluggish, and this transpired into fewer home mobile PC shipments. Consumers were searching for promotional sales that simply didn’t materialise at retailers throughout the region.

PC shipments in Japan surpassed 3.6 million units in the third quarter of 2010, a 14.1 percent increase from the same period last year. Large deals in the enterprise and government sectors drove PC sales in the quarter. In the consumer market, replacement demand for primary PCs, both desktop and large-size mobile PCs, has continued to grow since the beginning of 2010.