Worldwide PC Shipments Declines 9.6% In Q1 2016

Worldwide-PC-Shipments-Declines-9.6%-In-Q1-2016Worldwide PC shipments totaled 64.8 mn units in Q1 of 2016, a 9.6% decline from Q1 of 2015 according to preliminary results by Gartner.

This was the sixth consecutive quarter of PC shipment declines, and the first time since 2007 that shipment volume fell below 65 million units.

“The deterioration of local currencies against the US dollar continued to play a major role in PC shipment declines. Our early results also show there was an inventory buildup from holiday sales in the fourth quarter of 2015,” said Mikako Kitagawa, principal analyst, Gartner.

“All major regions showed year-over-year shipment declines with Latin America showing the steepest drop, where PC shipments declined 32.4 percent. The Latin American PC market was intensely impacted by Brazil, where the problematic economy and political instability adversely affected the market,” said Kitagawa.

“The ongoing decline in US PC shipments showed that the installed base is still shrinking, a factor that played across developed economies. Low oil prices drove economic contraction in Latin America and Russia, changing them from drivers of growth to market laggards,” added Kitagawa.

PCs are not being adopted in new households as they were in the past, especially in emerging markets. In these markets, smartphones are the priority. In the business segment, Gartner analysts said the Windows 10 refresh is expected to start toward the end of 2016.

Lenovo maintained the No 1 position in worldwide PC shipments in the first quarter of 2016 despite a 7.2 percent decline in shipments. Lenovo experienced a shipment decline in all regions except North America, where the company’s PC units increased 14.6 percent from the same period last year. In the last four quarters, Lenovo has showed double-digit shipment growth in the US while the overall market has declined.

HP was split into Hewlett Packard Enterprise and HP at the end of 2015, and HP’s first quarter indicates the challenges the company faces in the PC market. HP has said it wants to stay away from low-profit segments and the first quarter of 2016 results reflect its efforts to emphasize high-end sales, which cost it shipments.

Dell’s worldwide PC shipments declined 0.4 percent in the first quarter, which was much better than the global industry average. Dell shipments increased in North America and Japan, but shipments declined in EMEA, Asia/Pacific and Latin America.

In the US PC shipments totaled 13.1 million units in the first quarter of 2016, a 6.6 percent decline from the first quarter of 2015. US PC shipment volume was the lowest in three years.

Asia/Pacific PC shipments reached 23.3 million units in the first quarter of 2016, a 5.1 percent decline from the first quarter of 2015. The ongoing fragile Chinese economy and weak global demand continued to dampen consumer sentiment in the region.

With high PC penetration in the major cities, it was a challenge to invoke PC replacements on the appeal of new technology. The PC life cycle is lengthening as many consumers are waiting until their PC breaks down before purchasing a new one.

PC shipments in EMEA totaled 19.5 million units in the first quarter of 2016, a decline of 10 percent year over year. In Western Europe, consumer demand remained stable in Germany and the UK while in France, the PC segment was impacted by the transition to high-definition TV.

Consumers preferred to buy new TVs or a specific box for the TV reception. In the business segment, large organizations are testing and evaluating Windows 10, and major deployment will start at the end of 2016.

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