PCs Suffer Steepest Quarterly Decline Ever: IDC

PC shipments in the first quarter suffered the steepest decline ever for a single quarter, according to research firm IDC.

The number of PCs shipped worldwide fell 13.9 percent compared to the first quarter of 2012, far worse than the 7.7 percent decline that IDC had forecast just last month in its Worldwide Quarterly PC Tracker. IDC has been tracking quarterly PC shipments since 1994.

It also marked the fourth consecutive quarter for year-over-year PC shipment declines, according to IDC.

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The figures are tough for PC makers, but also for Microsoft, which saw its Windows 8 launch not only fail to provide a positive boost to the PC market but also serve as the impetus behind market slowdown, according to Bob O'Donnell, IDC program vice president for clients and displays.

"While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the [user interface], 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," O'Donnell said in a statement.

Mini notebook shipments particularly faded in the quarter, while smartphones and tablets continue to divert consumer spending, according to IDC. Additionally, restructuring and reorganizing efforts from Hewlett-Packard and Dell have magnified the woes of the PC industry, O'Donnell added. IDC singled out Lenovo as a "notable exception as it continues to execute on a solid 'attack' strategy."

In its own statement, Lenovo said "there is still plenty of room to take share in this PC market." The vendor added that it is a "PC+" world, and Lenovo will also focus on tablets and smartphones going forward.

Shipments of Lenovo PCs, 11.7 million in the first quarter, were essentially flat compared to the year-ago quarter.

Lenovo also closed the gap on market leader Hewlett-Packard. HP shipped 12.0 million PCs, down 23.7 percent from the year-ago quarter. Dell shipments fell 10.9 percent to 9.0 million, Acer Group shipments declined 31.3 percent to 6.2 million and Asus shipments fell 19.2 percent to 4.4 million. All other vendors combined for a 10 percent decline year-over-year.

Meanwhile, whitebox system builders in the U.S. have also struggled mightily, according to IDC.

"Although the reduction in shipments was not a surprise, the magnitude of the contraction is both surprising and worrisome," said David Daoud, IDC research director for personal computing, in a statement. "The industry is going through a critical crossroads, and strategic choices will have to be made as to how to compete with the proliferation of alternative devices and remain relevant to the consumer. Vendors will have to revisit their organizational structures and go to market strategies, as well as their supply chain, distribution, and product portfolios in the face of shrinking demand and looming consolidation."

In the United States, PC shipments dropped 12.7 percent year-over-year, a tad better than the worldwide decline. Quarterly shipments of 14.2 million PCs was the lowest-level quarterly number since the first quarter of 2006. The U.S. has not had 10 consecutive quarters of year-over-year PC shipment declines.

PUBLISHED APRIL 10, 2013