Personal-computer shipments plummeted in every region of the world in the first quarter as buyers opted for smartphones and tablet computers and Microsoft Corp's newest operating system met with weak demand.
Global PC unit shipments fell 14 per cent in the first quarter - the worst such decline on record - to 76.3 million, a bigger drop than the 7.7 per cent decline IDC had forecast, the market researcher said in a statement yesterday. The slump was the steepest since IDC began tracking shipments in 1994.
Every PC maker except China's Lenovo Group Ltd experienced declines as businesses chose to install Microsoft's Windows 7 operating system on employees' computers instead of the newer Windows 8, Jay Chou, an analyst at Framingham, Massachusetts- based IDC, said in an interview. Consumers also shunned Windows 8 in favour of smartphones and tablets, which can handle many of the same tasks, he said. (PC SHIPMENTS PLUNGE)
"We don't have a lot of reason to be optimistic that the market will remain in more than replacement-cycle mode," Chou said. Consumers have found Windows 8's redesigned user interface disorienting, and prices for touch-screen enabled computers that run the software are still too high, he said.
The last time worldwide PC shipments experienced a double-digit percentage decline was in the third quarter of 2001, when the market was roiled by the September 11 terrorist attacks and the impact of a decline in technology stocks, Chou said.
Windows impact
Chou said Windows 8's absence of the familiar "Start" button and the necessity for users to switch between desktop and tile modes are turning off potential buyers in stores.
Microsoft, based in Redmond, Washington, introduced the latest version of Windows and a tablet called Surface in October to appeal to consumers, who are increasingly adopting mobile devices to surf the internet, access email and store pictures, music, documents and other information.
Surface sales have gotten off to a slow start. Fujitsu Ltd has blamed the poor reception to Windows 8 for weak PC sales, while Hewlett-Packard Co Executive Vice President Todd Bradley said in January that sales of Windows 8 had a disappointing debut.
Microsoft said the data reflects an "evolving and highly dynamic" PC market, where handheld computers perform like PCs and laptops can convert into tablets.
"Windows 8 sold over 60 million licenses in its first few months, a strong start by any measure," Mark Martin, a spokesman for Microsoft, said. "Along with our partners we continue to bring even more innovation to market across tablets and PCs."
Lenovo holds
Gartner Inc., another market-research firm, said PC shipments declined 11 per cent in the first quarter to 79.2 million units. Quarterly global shipments fell below 80 million machines for the first since 2009, Gartner said. IDC and Gartner both reported that PC shipments fell in the US, Europe and Asia.
Lenovo was the only top-five manufacturer that didn't see a decline in worldwide or US shipments, IDC said. Shipments at the second-largest global PC supplier were unchanged from the first quarter of 2012, giving it a current market share of 15 percent.
Hewlett-Packard remained the No. 1 worldwide supplier with a market share of 16 per cent, although unit shipments declined 24 per cent from a year earlier. Dell Inc was third with 12 per cent of the market after shipments declined 11 per cent.
The severity of the declines at Hewlett-Packard and Dell stem from the companies' protracted attempts to turn around their businesses, IDC said. Hewlett-Packard has been seeking to recover from years of strategy shifts, including an aborted plan to spin out its PC business, and Dell is pursuing a plan to go private amid a worsening outlook for desktop and laptop sales.
US market
In the US, Hewlett-Packard and Dell held the top two spots in market share, with 25 per cent and 22 per cent respectively. Apple Inc was third with a 10 per cent share. Lenovo, which was fifth with 9 per cent, saw shipments climb 13 per cent.
"Lenovo continues to outperform its traditional PC competition and there is still plenty of room to take share in this market," Brion Tingler, a spokesman for Lenovo, wrote in an emailed statement.
Apple's market-leading iPad tablet and its iPhones are helping the company cope with slumping PC demand compared with other manufacturers, Chou said.
"They are certainly better hedged against the decline of PCs than other vendors," he said.
