PC market in longest period of decline since records began, says Gartner

The global PC market has chalked up its eighth consecutive quarter of shipment declines in the third quarter of 2016, making the current slump in sales the longest since records began, said Gartner.

The three months to September saw year-on-year shipments drop by 5.7%, with a total of 68.9m devices sold, in the wake of ever-lengthening device refresh cycles and softening demand for machines in emerging markets.

Mikako Kitagawa, principal analyst at Gartner, said with so many devices at their disposal these days, PC upgrades and refreshes are no longer a top priority for consumers.

“According to our 2016 personal technology survey, the majority of consumers own and use at least three different types of devices in mature markets,” she said.

“Among these devices, the PC is not a high priority device for the majority of consumers, so they do not feel the need to upgrade their PCs as often as they used to. Some may never decide to upgrade to a PC again.”

In years gone by, third quarter was traditionally a relatively buoyant period for PC manufacturers, with shipments boosted by back-to-school marketing campaigns and users looking to refresh devices ahead of the fourth quarter holiday season.

According to Kitagawa, that is no longer the case, particularly in the US and other developed markets.

“Traditionally, the third quarter has been driven by back-to-school PC sales, but back-to-school marketing campaigns have become less effective for driving PC sales,” she said.

“With so many PCs already in the consumer market, US consumers do not feel the need to buy new PCs; many parents hand down old PCs to their kids.”

In the wake of the UK’s vote to leave the European Union in June 2016, market watchers repeatedly warned users of the risk of tech price hikes as a direct result of the pound losing value against the dollar in the months that follow.

The early signs suggest the Brexit vote has had little impact on PC shipments so far, with Isabelle Durand, principal research analyst at Gartner, suggesting the situation may have contributed to a slight uptick in sales during third quarter.

“UK buyers increased their orders for PCs this quarter in anticipation of the holiday season, and to get ahead of price rises expected due to a weak sterling,” said Durand.

In Western Europe, more generally, demand for PC units was higher in third quarter than the previous quarter, while every major country in Eastern Europe and Eurasia reported unit volume drops.

These trends contributed to the Europe, Middle East and Africa (Emea) region experiencing a 3.3% decline in shipments, with 19.2m units shifted during third quarter.

“The decline in Emea PC sales is linked to weak PC demand in the Eastern Europe, Eurasia and Middle East and Africa regions,” said Durand.

“The Middle East and North African PC market declined for the seventh consecutive quarter due to increasing security concerns and political instability.”

From a supplier perspective, Lenovo retained its position as the leader of the worldwide PC market, despite chalking up its sixth consecutive quarter of year-on-year decline shipment declines. Meanwhile, its nearest competitors, HP Inc and Dell, have both seen their shipments rise since second quarter.