FRAMINGHAM, MA – Worldwide PC shipments totaled 62.4 million units in the second quarter, down 4.5% year-over-year, says International Data Corp. The results beat the research firm's previous forecast of a 7.4% drop.
The US market performed best, reflecting the strength of the US dollar and relative market stability. Improvement in channel inventories appears to have contributed to the stronger results, along with an easier year-over-year comparison and easing of component supply. These types of supply-side drivers don't necessarily reflect a change in consumer purchases, however, IDC said. Even PC channels remain fairly cautious following challenges over the past year, so the results are not likely to raise the forecast, says the firm.
Nevertheless, improved inventory levels put the market on better footing for the second half of the year, and the expiration of free Windows 10 upgrades may transition some users into buying new systems, rather than updating older ones. Commercial evaluations of Windows 10 remain healthy and a near-term driver that could also be contributing to the relative strength in US shipments.
"The PC market continues to struggle as we wait for replacements to accelerate, along with some return of spending from phones, tablets, and other IT," said Loren Loverde, vice president, Worldwide PC Trackers & Forecasting. "Our long-term outlook remains cautious. However, the strong results in the US offer a glimpse of what the market could look like with pockets of growth and a stronger overall environment. It's not dramatic growth, but it could push the market into positive territory slightly ahead of our forecast for 2018."
"As expected, the start of the peak education buying season helped generate large Chromebook shipment volumes in the US," said Linn Huang, research director, Devices & Displays. "A somewhat unexpected boost came from intensified inventory pull-in as cautious channel players, who had been working to pare down inventory over the last several quarters, opened up inventory constraints a bit. This was likely a one-time shipment boost to bring aggregate inventory levels back to market equilibrium. The larger story remains whether an early wave of enterprise transition to Windows 10 could help close out a 2016 that is increasingly looking stronger in the US."
In Europe, market sentiment remained muted. "Even the best case scenario calls for PCs to face significant challenges, with a somewhat fragile stabilization in the long run. The preliminary results did not capture the potential repercussions from the Brexit vote, which is expected to affect the timing and scope of spending plans in Europe," said Jay Chou, research manager, IDC Worldwide PC Tracker. "IDC continues to monitor the evolving situation closely. The better than expected second quarter results should not be interpreted as a harbinger of significant improvements for PCs."
The US market grew nearly 5% in the second quarter. HP and Dell continued to vie for leadership of the US market, with HP recovering the title during the period. Lenovo and Acer also saw strong growth, outpacing the market leaders, but with a much smaller share. Despite uncertainty in various parts of the market, the competitive environment, strength of the US compared to other markets, strong gains in Chrome shipments, and a relatively easy comparison to year-ago shipments contributed to growth.
In the EMEA region results are expected to be in line with the forecast. Mobility needs continued to push interest toward notebooks, which supported overall volumes. This is the first recent quarter of comparison that was not impacted by Bing promotions, which inflated shipments through the first quarter of 2015. As a result, second quarter 2016 shipments represent a more normalized growth trend, still confirming long-term market erosion for traditional PCs, but showing hints of short-term stabilization. Currency fluctuations in the EMEA region, localized political developments in Western Europe, and ongoing instabilities in the Middle East are also constraining shipment growth.
The APeJ PC market witnessed a decline in line with expectations. Weakness in consumer demand continued in most countries across the region. Ramadhan observance affected consumer spending, while high inventory inhibited new shipments. Also, a number of commercial projects in India, Thailand, and the Philippines have been postponed until the next quarter.
The market in Japan performed better than the forecast and posted solid year-over-year growth. However, a slowing economic outlook, weaker Yen, and sluggish consumer spending further dampened demand.
Lenovo remained the worldwide PC market leader and continued its strong growth in the US market. However, shipments in other markets continued to decline, pulling down overall growth. Lenovo's lead in the share of total PC shipments shrunk over the past year from 1.8% a year ago to 0.4% this quarter. Nevertheless, the margin of leadership has fluctuated since Lenovo took the lead in 2013. Second quarter 2015 marked the largest lead Lenovo has ever held, and the company boosted its overall share to a peak of 21.7% in the fourth quarter of 2015.
HP had a solid quarter, with growth returning to positive territory after a year of declines. The US led regional growth with a gain of 11.5% from last year as the company rebounded from a couple of soft quarters, but other regions also saw growth in positive territory.
Dell also had a productive quarter, with worldwide growth recovering to more than 4%. Dell managed a strong recovery in Japan, while also driving solid growth in the US. However, EMEA continued to drag on overall results.
ASUS also saw growth recover in the second quarter of 2016, benefitting from an easier year-over-year comparison. The vendor pulled ahead of Apple for the number four spot in overall PC shipments.
Apple continues to face an increasingly competitive market as it awaits a refresh of its PC lineup. As a result, shipments experienced a decline from last year.
