HP Reclaims No. 1 Spot Amid 11 Consecutive Quarters of Declining Global PC Shipments

Is there a way out for the PC market, which has been in a slump for five years?

Gartner tentatively announced that global PC shipments in the second quarter of 2017 totaled 61.1 million units, down 4.3% from the same period last year. This marks the 11th consecutive quarter of decline. Since data collection began in 2007, the second quarter of 2017 recorded the lowest quarterly PC shipment volume on record.

Mikako Kitagawa, a senior researcher at Gartner, stated, “Rising PC prices due to shortages of DRAM, SSDs, and LCD panels had a tremendous negative impact on PC demand in the second quarter of 2017,” adding, “How companies cope with increased component costs varies by vendor.” "Some companies decided to handle the increase in component prices without raising the final consumer price, while others passed those costs on to consumers," he explained.


This means that large corporations cannot hastily raise prices because prices are fixed due to contracts that are renewed on a quarterly or even annual basis, and many consumers will postpone purchasing PCs until the price burden is alleviated.

Amidst this, HP reclaimed the top spot in the global PC market in the second quarter of 2017, displacing Lenovo. HP recorded year-over-year growth for five consecutive quarters. It saw increased shipments in most regions and performed particularly well in the U.S. market, recording significantly higher shipment volumes compared to the average of other regional markets.

Lenovo failed to sustain the growth momentum seen in the fourth quarter of last year and the first quarter of this year, with global shipments falling 8.4% in the second quarter of 2017. Shipments declined year-over-year in all major regions. Analyst Mikako Kitagawa stated that the second-quarter results reflect a shift in Lenovo's strategy from increasing market share per unit to protecting profits. Balancing market share and profitability is a challenging task for all PC manufacturers.

Dell, which focuses on PCs as a strategic business, recorded year-over-year growth for the fifth consecutive quarter with global shipments increasing by 1.4% in the second quarter of 2017. Among the top three companies, Dell is the only one capable of providing integrated IT services to companies using its technology.

US market on a downward trend as consumer PC demand declines

By region, U.S. PC shipments in the second quarter of 2017 totaled 14 million units, a 5.7% decrease compared to the second quarter of 2016. Declining demand for consumer PCs was the primary reason for the downturn in the U.S. market. The business market continues to grow steadily, and as the second quarter is typically a season for active PC purchasing, spending in the public sector is also showing steady movement in line with seasonal trends, as evidenced by previous indicators. However, the education market is struggling due to high demand for Chromebooks.

The Chromebook market has shown significantly faster growth than the overall PC market. Although Gartner did not include Chromebooks in the overall PC market, their impact on the PC market is quite substantial. While the overall PC market declined by 6%, Chromebook shipments increased by 38% in 2016.



PC shipments in Europe during the second quarter of 2017 totaled 17 million units, a 3.5% decrease compared to the same period of the previous year. Results varied by country. In the UK, some domestic companies are postponing PC purchases due to uncertainty surrounding the general election, a trend particularly pronounced in the public sector. In France, while consumer sentiment rebounded more than expected following the election of President Emmanuel Macron, PC consumption remains sluggish. In Germany, PC shipments increased as companies invested in new Windows 10-based hardware, while in Russia, the PC market continues to improve as the economy stabilizes.

PC shipments in the Asia-Pacific region in the second quarter of 2017 exceeded 21.5 million units, down 5.1% from the same period of the previous year. The Asia-Pacific PC market is significantly influenced primarily by market conditions in India and China. In India, the overall market slump was caused by a combination of factors, including sluggish demand as currency reforms stabilized somewhat after the first quarter, the lack of large-scale transactions compared to a year ago, and rising PC prices.

Meanwhile, the Chinese market took a significant hit as PC prices rose due to component shortages that began in late 2016, and inventory from the first quarter carried over to the consumer market in the second quarter of 2017. Further PC price adjustments were necessary to address the component shortages in the second quarter. Foreign brands also struggled considerably due to the depreciation of the yuan against the dollar. As PC purchases by major clients slowed due to price hikes, it also impacted overall shipments in the second quarter. Mature markets, however, maintained stable growth through PC refreshes.