PC Industry Suffered Its Worst Shipment Growth Rate Since 2002

The PC industry is officially in a rut as worldwide shipments of machines crawled to a seven year low of 78.1 million, a1.1 percent increase from the fourth quarter of 2007, according to preliminary results by research firm Gartner (News - Alert).

 

The sluggishness is due primarily to a sharper than originally expected recession in the United States, while Europe, the Middle East and African (EMEA) region have also felt the pinch due to an economic slow down across key countries, according to Mika Kitagawa, principal analyst for Gartner's Client Computing Markets group.

 “Asia/Pacific recorded the worst shipment growth since Gartner started its PC statistics research. Latin America met expectations, but its growth was much lower than in the past.”

 

Meanwhile, the mini-notebook PC sparkled during the holiday season, outpacing the overall mobile PC growth. This growth, combined with steep average selling price (ASP) declines in low-priced systems such as the mini, has contributed to the overall decline.

 

“The fourth quarter started out with a relatively optimistic view, but then it got worse every month,” Kitagawa said. “In the fourth quarter, U.S. businesses quickly cut IT spending with public sectors, including some government and education buyers, postponed PC procurement due to budget crisis concerns.”

 

Industry players have tended to vary in terms of growth. For example, Hewlett-Packard (News - Alert) saw limited growth above the global average in the fourth quarter of 2008, yet still experienced its lowest sales output since merging with Compaq in 2003. HP did well in EMEA by aggressively promoting the mini-notebook segment, but it was impacted by sales in the U.S. market.

 

At the same time Dell (News - Alert) did well in the Asia/Pacific regions while falling flat in North America and EMEA regions, according to Gartner research.

As mentioned previously, companies peddling low priced PCs such as mini-notebooks are performing better than most. Mini-notebook player Acer showed solid growth with worldwide PC shipments growing 31.1 percent in the fourth quarter of 2008. Lenovo (News - Alert) maintained the fourth position in the worldwide market in the fourth quarter, but it suffered a shipment decline for the first time since 2006.

 

“PC vendors focused on the professional market were especially hit by the weakening market conditions. Overall, consumer mobile PC shipments showed strength, but the shipment growth was boosted by steep ASP declines which were further accelerated by the popularity of mini-notebooks,” Kitagawa.

 

If global sales in the PC market were considered bad, the U.S. market could be accurately described as dismal in the fourth quarter of 2008, recording its worst shipment decline since the last U.S. recession in 2001. PC shipments in the U.S. declined 10 percent in the fourth quarter of 2008.

 

Although the numbers were lower than anticipated, Dell did maintain the top spot in the U.S. PC market in the fourth quarter of 2008 even with a 16.4 percent decline in shipments from the fourth quarter of 2007. The report says it was a weak professional market that gave Dell executives headaches.

 

The PC shipments in EMEA totaled 30.4 million units, a 4.9 percent increase from the fourth quarter of 2007. This region had not seen growth rates drop to this level since the 2000/2001 period. In this region, the consumer market was the least affected, with mobile PC growth in the high double-digits. Again, this growth has been attributed to the continued rollout of mini-notebooks.

 

The usually steady Asia/Pacific market saw 1.8 percent growth with volume reaching 19.5 million units in the fourth quarter. China and India, as expected, accounted for approximately 65 percent of the market in Asia/Pacific in the fourth quarter.

 

In the Latin American market, struggling currencies are having an adverse impact in PC sales. The PC market in Latin America grew 10 percent with shipments surpassing 7.2 million units in the fourth quarter.

 

In total, PC shipments worldwide totaled 302.2 million units in 2008, a 10.9 percent increase from 2007, according to Gartner. The top five ranking remained unchanged compared to 2007. The study pointed to Dell recovering from its restructuring process in 2008 as the reason it maintained the top spot.