Gartner: Global PC shipments fell 9.6% in Q1 2016

According to preliminary statistics from Gartner, a leading global information technology research and consulting company, global PC shipments in the first quarter of 2016 were 64.8 million units, down 9.6% from the first quarter of 2015. This is not only the sixth consecutive quarter of decline in PC shipments, but also the first time since 2007 that PC shipments have fallen below 65 million units.

"The weakening of currencies against the U.S. dollar continues to play a major role in the decline in PC shipments," said Mikako Kitagawa, principal analyst at Gartner. "Our preliminary estimates show that inventory levels have been building since the holiday sales boom in the fourth quarter of 2015."

Kitagawa further noted, "All major regions experienced year-over-year declines, with Latin America experiencing the largest decline, with PC shipments down 32.4 percent. Latin America's PC market was primarily driven by Brazil, where political and economic uncertainty has had a negative impact on the market. The continued decline in U.S. PC shipments indicates that the installed base continues to shrink, a phenomenon that is also common in developed economies. Lower oil prices have caused economic contractions in Latin America and Russia, shifting them from growth drivers to laggards."

The use of PCs by newly formed families is declining, especially in emerging markets, where smartphones are the priority purchase item. As for the commercial sector, Gartner analysts believe that Windows 10 is expected to set off a wave of upgrades starting from the end of 2016.

In the first quarter of 2016, Lenovo retained its position as the world's largest PC manufacturer despite a 7.2% decline in shipments (see Table 1). Lenovo's shipments declined in all regions, with only North America increasing by 14.6% year-on-year. In the past four quarters, Lenovo has achieved double-digit growth in the U.S. market, but has been declining in the overall market.

Table 1. Estimated unit shipments of PC manufacturers worldwide in the first quarter of 2016 (unit: thousands)

Note: The above data includes desktops, notebooks and top ultramobile models. All data are based on preliminary survey results, and the final estimates may change. The statistics are based on shipments from sales to channels.

Source: Gartner (April 2016)

HP was split into Hewlett Packard Enterprise (HPE) and HP Inc. (HPI) at the end of 2015, and the latter's performance in the first quarter showed that the company is facing challenges in the PC market. As HP Inc. has expressed its desire to move away from low-margin businesses, the company's emphasis on high-end sales business was also reflected in the first quarter of 2016 and paid a price in terms of shipments.

Dell's global PC shipments fell 0.4% during the first quarter, which was much better than the global average for the entire industry. Dell's shipments increased in North America and Japan, but declined in EMEA, Asia Pacific and Latin America.

In the United States, PC shipments totaled 13.1 million units in the first quarter of 2016, down 6.6% from the first quarter of 2015, marking the lowest PC shipment volume in three years.

"For manufacturers that focus on the consumer market, it is quite difficult to increase shipments," said Kitagawa. "In the first quarter of 2016, American consumers had no particular motivation to buy PCs. Sales of two-in-one PCs increased, but it was still not enough to offset the decline in desktop and traditional notebook sales."

Dell replaced HP as the top PC manufacturer in the US market (see Table 2). Dell's PC shipments in the US grew 3.1%, while HP's fell 17.3%. Dell's growth was mainly due to the commercial sector rather than the consumer market.

Table 2. Estimated unit shipments of PC vendors in the United States in the first quarter of 2016 (unit: thousands)

Note: The above data includes desktops, notebooks and top ultramobile models. All data are based on preliminary survey results, and the final estimates may change. The statistics are based on shipments from sales to channels.

Source: Gartner (April 2016)

In the first quarter of 2016, PC shipments in Asia Pacific reached 23.3 million units, down 5.1% from the first quarter of 2015. China's economy remains fragile, and weak global demand continues to dampen consumer confidence in the region. With PC penetration already high in major cities, it is a huge challenge to drive PC replacement using new technologies. PC life cycles are getting longer, so many consumers wait until their PCs break before buying new ones.

PC shipments in EMEA totaled 19.5 million units in the first quarter of 2016, down 10% from the same period last year. In Western Europe, consumer demand in Germany and the UK remained stable, but the French PC market was impacted by the trend of upgrading to high-definition TVs, with consumers preferring to buy new TVs or TV set-top boxes. In the commercial market, large enterprises are testing and evaluating the Windows 10 operating system, and large-scale deployments will only begin to appear at the end of 2016.