Gartner Announces 9.6% Decrease in Global PC Shipments in Q1 2016
The Asia-Pacific PC market declined 5.1% year-on-year, with replacements expected starting from the end of 2016.

According to preliminary results released by Gartner Inc., global PC shipments in the first quarter of 2016 fell 9.6% year-over-year to 64.8 million units, marking the sixth consecutive quarter of decline. This is the first time since 2007 that global PC shipments have fallen below 65 million units.

"The depreciation of currencies against the U.S. dollar continues to be a major factor in the decline of PC shipments," explained Mikako Kitagawa, a principal researcher at Gartner. "Initial research results from Gartner also indicate that inventory accumulation occurred following the year-end peak season in the fourth quarter of 2015."

"PC shipments in all major regions worldwide showed a year-over-year decline. In particular, Latin America recorded the sharpest drop with a 32.4% decrease, largely due to the impact of Brazil, where difficult economic conditions and political instability are negatively affecting the market," said Senior Researcher Kitagawa. "The continued decline in U.S. PC shipments indicates that the installed base is continuously shrinking, and this phenomenon is occurring commonly in developed countries." He added, “Furthermore, as low crude oil prices cause economic contraction in Latin America and Russia, countries in these regions are falling from growth leaders to market laggards.”


▲ Visitors are looking at laptops at the exhibition hall (Photo unrelated to the article)

PCs are not being purchased by new households as much as they used to be, and this trend is particularly pronounced in emerging markets. In these markets, smartphones are becoming the priority. For the enterprise market, Gartner predicts that demand for Windows 10 replacements will begin around the end of 2016.

Lenovo maintained its position as the number one global PC shipper in the first quarter of 2016, despite a 7.2% decrease in shipments (see Table 1). While Lenovo's PC shipments declined in all regions except North America, the North American region recorded a 14.6% increase year-over-year. Furthermore, while Lenovo's PC shipments decreased in all markets over the past four quarters, the U.S. market showed double-digit growth.


▲ Table 1. Estimated global PC vendor shipments for Q1 2016 (Units: thousands) Source: Gartner (April 2016)

The first quarter following HP's split into HP Enterprise and HP Inc. (hereinafter HP) in late 2015 revealed the challenges the company is facing in the PC market. HP reported a decrease in shipments in the first quarter of 2016 as a result of focusing on the high-end market to move away from low-profit markets.

Dell's global PC shipments in the first quarter of 2016 declined by only 0.4%, better than the industry average. While shipments increased in the North American and Japanese markets, they declined in the Europe, Middle East, and Africa (EMEA), Asia Pacific, and South America regions.

The U.S. PC market recorded 13.1 million units in the first quarter of 2016, down 6.6% from the same period of the previous year. This is the lowest figure for U.S. PC shipments in the past three years.

"Vendors focused on the consumer market struggled to boost sales in terms of shipments. There was no particular incentive to drive PC purchases by U.S. consumers during the first quarter of 2016. While sales of 2-in-1 PCs increased, they were insufficient to offset the decline in sales of desktops and traditional laptops," explained Principal Researcher Kitagawa.


▲ Table 2. Estimated PC Vendor Shipments in the U.S. Market, Q1 2016 (Units: Thousands) Source: Gartner (April 2016)

Dell overtook HP to claim the top spot in the U.S. PC market by shipment volume (see Table 2). In the U.S. PC market, Dell recorded a shipment growth rate of 3.1%, while HP saw a 17.3% decline. Dell was able to achieve excellent results by focusing on the enterprise market rather than the consumer market.

The Asia-Pacific PC market recorded 23.3 million units in the first quarter of 2016, down 5.1% from the same period of the previous year. This is attributed to the fact that consumer sentiment continues to contract due to China's unstable economic situation and weak global demand, and it has been difficult to induce users to replace their PCs by promoting new technologies, as major cities have high PC penetration rates. Additionally, the extending lifespan of PCs is also having an impact, as most users tend to purchase new products only after their current devices break down.