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Worldwide PC hardware sales shrink again as tablet shift continues

Lenovo remains #1 manufacturer as market dips 8.6%

A study from research firm Gartner has claimed that the worldwide PC market is continuing to decline, shrinking another 8.6 per cent year on year in the last quarter as the public shifts more and more to the use of tablets and smartphones for everyday computing needs.

80.3 million PCs were shipped globally in Q3, 2013, according to the study, less than any other comparable quarter since 2008. Usually, the period is associated with a sales spike, as parents and students purchase new laptops and home machines in preparation for a return to schools, colleges and universities, but Gartner's research shows that iOS and Android tablets are rapidly taking over as the go-to device for connected studying.

"Consumers' shift from PCs to tablets for daily content consumption continued to decrease the installed base of PCs both in mature as well as in emerging markets," said Gartner's Mikako Kitagawa of the sixth consecutive market shrinkage. "A greater availability of inexpensive Android tablets attracted first-time consumers in emerging markets, and as supplementary devices in mature markets."

Not all PC suppliers are feeling the pinch just yet, however, with the market coalescing with its biggest suppliers. Lenovo, HP and Dell all saw an increase in unit sales and market share from the same quarter last year, with Lenovo retaining its position as number one global PC retailer. That is in spite of a contraction in its traditional marketplace of Asia - a shift somewhat counterbalanced by a growth in US sales; both for Lenovo specifically and the market in general.

"The positive U.S. results could mean that seasonal strength and channel fill for new product launches in 3Q13 finally overcame the structural decline." Ms. Kitagawa explained. "Even though 3Q13 shipments were compared with artificially weak 2Q13 because of inventory control for the Windows 8 launch at the time, the 3Q13 results imply the U.S. market may have passed the worst declining stage, which started in 2010. The shrinking installed base of PCs has also passed the steepest decline phase because the structural change has progressed fairly quickly. Tablets will continue to impact the PC market, but the U.S. PC market will see a more moderate decrease rather than a steep decline in the next two years."

However, whilst the US is nosing upwards, EMEA territories are in decline, dropping 13.7 per cent of sales. That drop has been attributed, in part, to a new generation of processors and preparation for the launch of Windows 8.1.

"During the third quarter many vendors went through product transitions to Intel's new Haswell and Bay Trail processors, while preparing for the October launch of Windows 8.1," Gartner's Isabelle Durand posits. "These product transitions and the clearing of old inventory that is taking place through the third and fourth quarters of 2013, have played a part in the slowdown of the PC market in EMEA. Many PC vendors also introduced Android tablets as a main part of their portfolios and this initiative drove PC sales downward."

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Latest comments (6)

James Ingrams Writer 8 years ago
I think people may be buying tablets on top of their PC. When it comes to gaming, at last, most AAA PC games are console conversions, currently still designed to run on 8 year old consoles, so easily running on 4/5 year old PC's. Between these non demanding console conversion PC games and the large indie market, the average PC gamer has not needed to upgrade his PC, let alone buy a new one! My desktop is 4 years old and just needed some more memory so I could upgrade my O/S. There hasn't been a single AAA PC game since 2010 that I have not been able to run on it!
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Alex M Game Developper, Tribute Games Inc.8 years ago
To those that say the PC gaming market is all doom and gloom. Here's some thoughs :

1 - most people would buy a desktop / laptop for email, web browsing, some doc editing can now do so with a tablet
2 - most PC don't get obsolete as fast as they would 5 or 10 years ago, you can get away from buying a new computer with incremental upgrades, this is very true for PCs in business where people need to do Office and that's about it.
3 - tablet's obsolescence happen must more faster than on PC (about 2 year), new OS every 6-9 month make sure of that (think iOS 7 on older hardware)

Now, most gamer still own a PC and play a lot, and also buy a lots (looking at you steam sales and humble bundles). Not only that, but eSport trend is going up, think about 800k viewers of last week LOL season 3 final. PC market is getting saturated, not smaller. I think in maybe 5 years (maybe even less) the tablet market is gonna be as saturated as people wont need a more powerful tablet.
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Klaus Preisinger Freelance Writing 8 years ago
The study is talking about PCs overall, not gaming PCs. If you look at the processing power over the last years and the average office CPU power requirements, then it is easy to see that PCs might get used longer than they were a few years back. The same goes for non-gaming home PCs, they exist as well and you'd be hard pressed to replace them with another PC.

With the PC being as diverse as it is, the gaming market could still grow while the overall market is shrinking. Gamers also get older, have more disposable incomes, making gaming PCs more likely to be bought. Gaming has penetrated an age range where people buy homes and cars for tens of thousands of Dollars. Compared to those expenses, spending a thousand mucks on a cherished hobby is not unlikely. if gaming is the hobby, then the PC as "the best" in terms of power stands out.

Consoles targeting a lower age demographic might have more of a problem though.
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Show all comments (6)
Adam Campbell Product Manager, Azoomee8 years ago
I'm always confused why people think gaming is the be all and end all of the PC when it comes to sales. People arent buying millions of laptops and PCs simply for gaming.

The overall market has objectively been in decline for a while. Partly because of saturation in developed countries and partly because of changing habits in terms of internet access. I'm on my tablet now whilst my laptop is closed, awaiting a more complex task. I read all my emails and get news updates instantly with my always on devices, i.e phone and tablet.

Outside the more developed world, mobile phones lead Internet access in regions such as Africa, which as you can imagine is a massive continent. Given a difference in the stage and nature of infrastructure for networking, mobile access is far more reliable, practical and accessible to the majority than once desirable PCs and copper wires.

Yes, PC gaming itself is growing, and computer's still sell, but there is definitely a correlation between the rise of mobile Internet and the decline of PC sales. If it wasn't a factor, you wouldnt hear Microsoft, HP, Dell and Lenovo saying so. Are you surprised that one has bought Nokia Lumia, one wants to buy HTC and the others are aggressively trying to get back into the mobile mix?

Everything has a place for sure but the market is changing.

Edited 2 times. Last edit by Adam Campbell on 10th October 2013 8:44pm

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Yiannis Koumoutzelis Founder & Creative Director, Neriad Games8 years ago
Seriously... these companies have to see what Lenovo is doing and keep up!
The more the years pass the more i realize that companies, like humans, grow old and tired! Well done Lenovo!

The only other company that honestly tries something new is Dell (with those nice AIO XPS) but even them not wholeheartedly. They keep messing up. there has to be one flaw in their every offering! Either graphics being mediocre or SSD lacking or no pen... etc. Sadly, Acer and Asus have really dropped the ball and they are dragging the rest down. Even HP but it is a different story altogether.
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Bruce Everiss Marketing Consultant 8 years ago
If tablets aren't already the number one gaming platform then they will be soon.
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