{"id":2937,"date":"2013-07-16T12:30:53","date_gmt":"2013-07-16T16:30:53","guid":{"rendered":"http:\/\/blog.nccomputertech.com\/?p=2937"},"modified":"2013-07-16T12:30:53","modified_gmt":"2013-07-16T16:30:53","slug":"the-pc-fights-back-u-s-sales-decline-is-slowing","status":"publish","type":"post","link":"https:\/\/nccomputertech.com\/techtalk\/2013\/07\/16\/the-pc-fights-back-u-s-sales-decline-is-slowing\/","title":{"rendered":"The PC fights back: U.S. sales decline is slowing"},"content":{"rendered":"

Last week, the headlines screamed that computer shipments had plunged roughly 11 percent in the second quarter<\/a>, after dropping a disastrous 14 percent<\/a> the quarter before that. While it\u2019s hardly good news, we\u2019ve known for a while that the rise of tablets, \u201cgood-enough computing<\/a>,\u201d and (maybe, just maybe<\/a>) a lackluster response to Windows 8\u2019s new-look interface have been bad for PC sales.
\nBut wait! A closer look at the numbers shows an interesting trend\u2014if not exactly upward, then less steeply downward. Some signs indicate that we may be past the worst of the bleeding\u2014though you shouldn\u2019t expect to see actual growth<\/em> out of the PC industry any time soon.<\/p>\n

Making scary numbers slightly less scary<\/h2>\n

Enduring a 14 percent drop in one quarter and then an 11 percent drop in the next one definitely isn\u2019t good, but it\u2019s important to note that those drops don\u2019t mean PC sales are down a total of 25 percent for the year. The data is year-over-year, comparing each 2013 quarter to its corresponding quarter in 2012. So computer shipments in the second quarter of 2013 dropped by 11 percent compared to the second quarter of 2012, not<\/em> compared to the first quarter of 2013.
\nGot it? Knowing that, the latest numbers are less devastating.
\nYes, the first quarter\u2019s year-on-year decline was the sharpest ever, dropping from 88.6 million PCs shipped in Q1 2012 to about 76.2 million PCs in Q1 2013, according to IDC. (Data from Gartner, another research group, yields roughly the same numbers.) Fourteen percent! Geez.
\nBut when you compare the Q2 2013 shipment number to the Q1 2013 shipment number, you realize that the drop hasn\u2019t been excruciating over the past seven months alone. According to IDC, 75.6 million PCs shipped in Q2 2013\u2014a drop of just 600,000 units from the first quarter of the year.<\/p>\n

\"\"<\/a>
According to IDC, the decline in PC sales in the United States is slowing\u2014and a few vendors even saw an uptick.<\/figcaption><\/figure>\n

Also, the top five PC vendors all moved more computers in the second quarter of 2013 than they did in the first quarter. The quarter-to-quarter unit loss came solely from \u201cOthers.\u201d (Sorry.)
\nRemember: Shipments are down a lot compared to last year. But comparing one quarter to the next, the PC shipment decline may<\/em> be slowing down.
\nEven more heartening, the drop in shipments was considerably smaller in the United States than in the rest of the world: Gartner says second-quarter U.S. shipments declined by just 1.4 percent year over year, while IDC says U.S. shipments dropped by 1.9 percent year over year in Q2.
\nWhy such relatively smooth sailing? Simple: In the United States, we may\u2014may<\/em>\u2014already be over the worst of the tablet hump.<\/p>\n

Much ado about tablets<\/h2>\n

\u201cWe know that a lot of tablet buyers feel that a lot of what they needed to do with a computer has been taken care of by a tablet,\u201d says Jay Chou, a senior research analyst at IDC. \u201cThat said, no one in our research feels that a tablet can 100 percent replace a PC. It\u2019s not a perfect substitute.\u201d
\nAs I and many others have said before, tablets are a big part of the reason why PC sales are hurting. No, most people aren\u2019t replacing PCs outright with tablets, but people are<\/em> delaying their purchase of new computers, satisfied with the base-level oomph<\/em> that their slates provide. Chou reiterated that the practice is definitely occurring.<\/p>\n

\"\"Apple<\/small>
Tablets remain very popular, of course, but Gartner thinks that the category’s damaging effect on PC sales in the United States will diminish as the market matures.<\/figcaption><\/figure>\n

Here\u2019s the thing: Growth in the PC industry requires both sales to new customers in developing countries and regular upgrades by people who already own computers. If happy tablet users delay buying new PCs en masse<\/em>, that\u2019ll put a big hurt on PC shipments. And what do you know! PC shipments have plummeted over the past two quarters (remember: compared year-over-year), and have been shrinking for more than a year.
\nBut Mikako Kitagawa, principal analyst at Gartner, says the slim drop in U.S. figures during the second quarter may indicate that things are starting to stabilize.
\n\u201cThe U.S. industry is definitely the most advanced [in terms of tablet adoption],\u201d says Kitagawa. \u201cSo the U.S. market might see some slowdown of tablets eating into the PC space.\u201d<\/p>\n

We\u2019re not out of the woods yet<\/h2>\n

\u201cBut in other regions, [the loss of PC share to tablets] is going to continue quite a bit,\u201d Kitagawa continues.
\nAnd make no mistake: Even with a minimal quarter-to-quarter drop, the PC industry is still in the doldrums, especially on a global scale.
\n\u201cUsually, you see a seasonality in PC shipments, where the first quarter is the lowest of the year, and every quarter after that should be a little bit higher, really peaking in the holiday season,\u201d says Chou. \u201c[The second quarter] results thoroughly bucked the seasonal trend.\u201d<\/p>\n

The light at the end of the tunnel<\/h2>\n

Indeed, both Gartner and IDC anticipate two to three years of continued decline in worldwide<\/em> PC shipments. (Here\u2019s hoping the United States fares better.) But to put a somewhat optimistic spin on things, current estimates predict that the PC\u2019s decline over that time will be slight. The second-quarter results matched predictions from IDC and Gartner, and both Chou and Kitagawa say their firms anticipate that the worldwide sales slump will taper off to a low, single-digit decline for the rest of 2013.
\nThe ship is still rocking, but not as hard. Queasy stomachs, take heart.
\n\u201cOnce the PC becomes a certain level of market size, shrinking into the size it\u2019s supposed to be alongside tablets, it\u2019s going to settle down and go back to more steady growth\u2014not strong growth\u2014going forward,\u201d says Kitagawa.<\/p>\n

\"\"
If PCs\u2014and Windows 8.1\u2014can give users compelling reasons to upgrade, they just might stop being the underappreciated microwaves of computing.<\/figcaption><\/figure>\n

Chou agrees, saying he expects tablet growth to taper off starting in 2014 or 2015, and PC sales to stabilize. Kickstarting the PC market will take more than tablet saturation, however: \u201cA lot of that will depend on things like pricing, and how well Windows 8.1 turns out\u2014how comfortable people feel using that.\u201d
\nIndeed, the PC\u2019s stall is due to a wide variety of factors, but that\u2019s a whole different story<\/a>. For now, rejoice in the fact that, while things are still looking down, the PC industry\u2019s prospects aren\u2019t quite as bleak as they appeared earlier this year. And hey! If you consider tablets to be PCs in yet another form factor, the future has never looked brighter.
\nvia PCWorld<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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