PC Slump Continues as Shipments Drop 20% in Western Europe

The drastic decline in sales of PCs continues apace with western Europe recording a huge 20% slump in the second quarter of 2013.

While there is little surprise that the PC market is continuing to contract, it is the size of that contraction which is surprising. According to the latest figures from research firm Gartner, PC shipments fell across all sectors with mobile and desktop PC shipments declining 24% percent and 12%, respectively.

PC shipments in the professional market declined 13.5%, while the consumer PC market decreased 26% percent in the second quarter of 2013. The figures from Gartner do not take into account tablets, which continue to grow year-on-year despite figures this week showing a slump in shipments in the second quarter compared to the first three months of the year.

The only manufacturer in the top ten to record double digit growth in the region was Lenovo, which saw a 19% spike in shipments, moving it up to third spot in the list.

HP still tops the list despite recording a 17.4% dip in shipments compared to the same period in 2012, but this was nothing compared to the 44% drop in shipments which Acer recorded with Gartner putting the dramatic decline down to Acer shifting its portfolio away from netbooks to Android tablets.

Struggle

Dell, which is currently in the middle of a power struggle as founder Michael Dell attempts to take the company off the stock market, recorded a very small decline in the period with Meike Escherich, principal research analyst at Gartner, putting the improvement down to "its strategic shift from profitability protection to market share gain."

Escherich suggests that the overall slump can be attributed to vendors reducing their inventory as they prepare for the launch of new PCs running the updated Windows 8.1 and powered by the latest Intel chips.

"We can expect some attractive new PCs in the stores for the fourth quarter of 2013, running Windows 8.1 with thinner form factors and longer battery life enabled by Intel's Haswell processors," said Ms Escherich.

New generation

"These PCs will compete with high-end tablets and will be complemented by a new generation of Atom-based devices that will compete with low-end basic tablets."Although this will not fully compensate for the ongoing PC decline, it does create an opportunity for profit in the midrange and more high end PC segments."

Looking at the UK in particular, shipments declined 13% quarter-on-quarter, which marks the 11th consecutive decline for PC shipments in the UK. "During this time the notebook market has shrunk nearly 25 percent in unit volume. The U.K. notebook market totaled over 2 million units in the second quarter of 2010 and has now reached just under 1.5 million units," said Ranjit Atwal, research director at Gartner.

Apple, whch is number six PC manufacturer in the UK, recorded a lower than average decline but its arch rival Samsung recorded a huge 50% drop in shipments.

"After several depressing years the PC vendors are now at a make or break point in this industry," said Mr. Atwal. "The product transition involving both hardware and the upgrade of Windows 8.1 needs to reverse the steep declines we have seen in the PC market."