PCs Mark Steepest Drop in 2013, Lenovo maintained the No. 1

Personal-computer shipments fell 10 percent in 2013, marking the worst-ever decline after lackluster holiday sales underscored how consumers and businesses are shunning machines for mobile devices, two research firms said.

Manufacturers shipped 315.9 million units, returning to 2009 levels and making it the “worst decline in PC market history,” researcher Gartner Inc. said in a statement yesterday. IDC also said shipments had a record decline.

U.S. consumers omitted PCs from their holiday shopping lists while buyers in Asia opted for smartphones and tablets. More computing tasks are moving to websites and applications tailored for wireless gadgets, rather than software installed on laptops and desktops. The annual drop eclipsed the previous record decline of 3.9 percent in 2012, Gartner said.

“Consumer spending during the holidays did not come back to PCs as tablets were one of the hottest holiday items,” said Mikako Kitagawa, an analyst at Stamford, Connecticut-based Gartner. “In emerging markets, the first connected device for consumers is most likely a smartphone, and their first computing device is a tablet.”

Global sales fell 6.9 percent in the fourth quarter -- the seventh straight drop -- to 82.6 million units, Gartner said. IDC, based in Framingham, Massachusetts, reported a decline of 5.6 percent in the same period.

Corporate Upgrades

Lenovo Group Ltd. (996) maintained the No. 1 spot worldwide with 18.1 percent market share in the fourth quarter, helped by a 6.6 percent increase in shipments, according to Gartner. Hewlett-Packard Co. (HPQ) was second with a 16.4 percent share as shipments declined 7.2 percent. Dell Inc. was third, the researcher said.

“We are extremely optimistic about the future of the $200 billion-plus PC industry,” Yang Yuanqing, Lenovo’s chairman and chief executive officer, said in a statement. “We continue to outperform the market while steadily improving profit and margin.”

Lenovo shipped 14 million PCs in the last quarter, it said.

Growth in the PC market has become dependent on consumers and businesses replacing existing machines, rather than wooing new buyers. Enterprise demand is being driven in part by Microsoft Corp. (MSFT)’s plan to end support for its 13-year-old Windows XP operating system in April, compelling businesses to buy new PCs along with software upgrades.

U.S. shipments shrank 7.5 percent in the fourth quarter to 15.8 million units, Gartner said. Unit sales in Europe, the Middle East and Africa fell 6.7 percent to 25.8 million, while the Asia-Pacific region saw a 9.8 percent decline to 26.5 million.

Loren Loverde, an analyst at IDC, said the decline in PC shipments was the worst since the researcher started tracking data in 1981, with the previous record seen in 2001, when sales shrank 3.7 percent.

“We don’t think it’s quite the bottom yet,” Loverde said. IDC is predicting a 3.8 percent decline in PC shipments for 2014 this year, and then growth of less than 1 percent in 2015, he said.

Contributed  By Aaron Ricadela - Bloomberg

China's Lenovo overtakes HP as global No 1 PC maker

PALO ALTO (CBS/AP) – Lenovo beat out rival Hewlett-Packard to become the No. 1 PC maker by a narrow margin, according to both firms.

In the Asia/Pacific (excluding Japan) region overall PC shipments in the region fell slightly below forecast due to China. Weak sell-in to China during April and May constrained shipments. Although June shipments in China improved, expectations for the third quarter are being lowered to reflect remaining inventory as well as economic pressures.

Worldwide shipments of personal computers fell 11 percent in the April-June period, according to data from research firms Gartner and IDC, as people continued to migrate to tablets and other mobile devices.

Gartner Inc. said Wednesday that the PC industry is now experiencing the longest decline in its history, as shipments dropped for the fifth consecutive quarter. Computer makers shipped 76 million PCs in the April-June period, down from 85 million in the same  three months of 2012, according to Gartner.

International Data Corp., which uses slightly different methodology, essentially came to the same conclusion, though it noted that the decline was slightly smaller than expected.

“With second quarter growth so close to forecast, we are still looking for some improvement in growth during the second half of the year,” said Jay Chou, senior analyst at IDC, in a statement. “Slower growth in Europe and China reflect the risks, while the improved U.S. outlook reflects potential improvement.”

Gartner’s Mikako Kitagawa said inexpensive tablets are displacing low-end computers in “mature” markets such as the United States. In emerging markets like China, meanwhile “inexpensive tablets have become the first computing device for many people, who at best are deferring the purchase of a PC. This is also accounting for the collapse of the mini notebook market,” she added.

IDC said the numbers “reflect a market that is still struggling with the transition to touch-based systems running Windows 8.”  Microsoft Corp.’s latest operating system launched in October and sales have disappointed analysts. But Kitagawa said that while “Windows 8 has been blamed by some as the reason for the PC market’s decline, we believe this is unfounded as it does not explain the sustained decline in PC shipments.”  - CBS, AP, AFP

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