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PC shipments continue to drop, indicates IDC

Global PC shipments suffered their steepest year-over-year decline since IDC began tracking the PC market's quarterly performance in 1994, the research firm reported.

PC manufacturers shipped 76.3 million units in the first three months of the year, a 13.9 per cent decline from the same period in 2012, IDC reported. The research firm had anticipated a major year-over-year drop-off in PC shipments but reality far surpassed IDC's pre-quarter forecast for a 7.7 per cent decline.

Analysts were mixed about the primary cause for the sluggishness of the PC market, with some pointing to the disappointing performance of Microsoft's new Windows 8 operating system as a main culprit. "At this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market," IDC analyst Bob O'Donnell said.

"While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the UI, removal of the familiar Start button, and the costs associated with touch have made PCs a less attractive alternative to dedicated tablets and other competitive devices. Microsoft will have to make some very tough decisions moving forward if it wants to help reinvigorate the PC market."

Patrick Moorhead, principal analyst at Moor Insights & Strategy, said other factors were more important to the decline in PC shipments.

"While the lackluster consumer reception of Windows 8 impacted Q1 sales, it isn't the primary reason for the slowdown. The slow economy, particularly in emerging regions, is the primary culprit," Moorhead said.

"Microsoft needs to double down on Blue and fix the positioning so when the economy does rebound, PCs will start growing again. Intel and AMD have delivered the right hardware technology platforms and now it's up to Microsoft."

Another indication that the PC market is at a crossroads came from IHS iSuppli report on semiconductor revenue for all of 2012, also released this week.

IHS described 2012 as "a miserable year for the semiconductor market and suppliers" in its report on 2012 sales figures for the top 25 global chip manufacturers. Perhaps, but not for all of the companies tracked.

In fact, the breakdown of chip firms which enjoyed growth in 2012 versus those which had a rough time offers yet more compelling evidence that as the PC market has shrunk, the mobile device market has grown.

Nine of the Top 25 semiconductor companies suffered double-digit declines in yearly sales as compared with their 2011 numbers, with many of those companies concentrated on developing products for the PC market. Among the handful of firms which enjoyed growth, most were focused or had a very strong presence in the mobile device market.

Qualcomm, for instance, enjoyed the strongest year-over-year revenue growth at 29.2 per cent, as detailed in the chart below. Advanced Micro Devices, meanwhile, was the biggest loser in 2012, suffering a 17.6 per cent decline in sales.

Companies like Intel and Nvidia play heavily in the PC market but also have diversified portfolios touching the data center, HPC space, and mobile. Intel managed to muddle through 2012 with a 2.7 percent decline in sales, while Nvidia actually grew its revenue by a robust six per cent on the year, according to IHS.

In the declining market for PCs, Hewlett-Packard managed to hold onto its crown as the top vendor in the world market, according to IDC. HP captured a 15.7 per cent share of the global PC market by shipping nearly 12 million units in the first quarter of 2013, though that represented a 23.7 per cent decline from its shipments in the first quarter of 2012.

Lenovo, in second place, shipped 11.7 million units in the first quarter. That figure was flat against the company's performance in the first quarter of 2012, but given the tumbling numbers of the other members of IDC's top five list, Lenovo pretty much hit it out of the park.

Dell, the third-ranked PC manufacturer in the first quarter, shipped just over 9 million units in the first three months of 2013, a 10.9 per cent year-over-year decline. Rounding out the top five were Acer (6.2 million units shipped, down 31.3 per cent) and Asus (4.3 million, down 19.2 per cent), IDC reported.