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Consumers Take a Holiday -- From Buying PCs

Consumers Take a Holiday -- From Buying PCs
By Jennifer LeClaire

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"Apple has been clever, Microsoft bumbling. Apple has been able to capitalize on Microsoft's mistakes," said analyst Roger Kay. "PC sales may pick up again on the back half of 2013. By then, the OEMs will have more products in market that make use of touch, and corporations will begin adoption. But the days of heady growth in PCs are over."
 


It's official. PC sales are down -- way down. In fact, PC sales have posted a holiday dip for the first time in five years.

Specifically, worldwide PC shipments totaled 89.8 million units in the fourth quarter of 2012. That's down 6.4 percent compared with the same quarter in 2011 and worse than the forecast decline of 4.4 percent. So says the IDC Worldwide Quarterly PC Tracker.

Although the quarter marked the beginning of a new stage in the PC industry with the launch of Windows 8, Microsoft's much-hyped operating system did not immediately bring an upward shift in PC demand. In fact, the PC market continued to take a back seat to competing devices and sustained economic woes.

No Big Surprises

"Although the third quarter was focused on the clearing of Windows 7 inventory, preliminary research indicates the clearance did not significantly boost the uptake of Windows 8 systems in Q4," said Jay Chou, senior research analyst with IDC's Worldwide Quarterly PC Tracker. "Lost in the shuffle to promote a touch-centric PC, vendors have not forcefully stressed other features that promote a more secure, reliable and efficient user experience."

Few are surprised by the lackluster fourth-quarter results. The PC market faced challenges in 2012, namely from smartphones and tablets. What's more, questions about the use of touch on Windows PCs vs. tablets slowed commercial spending on PCs.

"Consumers expected all sorts of cool PCs with tablet and touch capabilities. Instead, they mostly saw traditional PCs that feature a new OS (Windows 8) optimized for touch and tablet with applications and hardware that are not yet able to fully utilize these capabilities," Chou said. "Despite a generally weak performance, some leading brands managed to do well relative to the market."

Who's Fault Is It?

We caught up with Roger Kay, principal analyst at Endpoint Technologies Associates, to discuss the issue. We asked him a pointed question: How much of this decline is Microsoft's fault (Windows 8) and how much of it is Apple's fault (iPad)? He told us the short answer is "both."

"Apple has been clever, Microsoft bumbling. Apple has been able to capitalize on Microsoft's mistakes, accelerating the trend," Kay said. "PC sales may pick up again on the back half of 2013. By then, the OEMs will have more products in market that make use of touch, and corporations will begin adoption. But the days of heady growth in PCs are over."

HP Defends Top Position

Hewlett-Packard continued to defend its top position in IDC's worldwide ranking, recovering somewhat from past weakness in key markets. IDC said an aggressive push for Windows 8 volume helped HP make gains in Asia/Pacific and its home turf in the U.S. Meanwhile, Lenovo outpaced the market with growth of over 8 percent. Volume reached a new record-high of more than 14 million units, with continued success in channel wins in the U.S., Europe, the Middle East and Asia.

Dell continued to lose ground as it faces aggressive competition from other leaders and looks for better margins. Worldwide shipments were down more than 20 percent year over year -- faster than declines over the past several years -- with U.S. volume declining almost as much. Acer Group, like a few other vendors, remains heavily dependent on consumer spending. And Asus held onto its top-five spot globally and stretched the distance between itself and other consumer-focused vendors with growth of 5.6 percent year-on-year.
 

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