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PC markets see worst decline since 1994

IDC says global PC shipments declined by almost 14% in first quarter

PC markets see worst decline since 1994
PC shipments dropped 13.9% in Q1 2013.

Global PC shipments suffered their worst drop since regular tracking began in the first quarter of this year, according to IDC.

Worldwide PC shipments were down 13.9% year-on-year, to 76.3 million units, almost double the forecasted decline of 7.7%.

The analyst company said that the market had been hit by a weak reception for Windows 8, tablet and smartphones cutting into consumer spending, and pricing and component supply problems for newer ultraslim models with touch capabilities. Refresh cycles in the enterprise have also slowed due to poor economic conditions.

IDC said that it was the worst year-on-year decline since it began quarterly tracking in 1994, and was also the fourth consecutive declining quarter.

"At this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market," said Bob O'Donnell, IDC Program vice president, Clients and Displays. "While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the UI, removal of the familiar Start button, and the costs associated with touch have made PCs a less attractive alternative to dedicated tablets and other competitive devices. Microsoft will have to make some very tough decisions moving forward if it wants to help reinvigorate the PC market."

The PC market was also impacted by ongoing restructuring issues with vendor companies including HP and Dell. HP retained its market leadership, with just under 16% market share, but its worldwide shipments were down 23% year on year in the first quarter. Lenovo, in second place with 15.3% market share, stood out from the other vendors with strong growth in key markets except for Asia-Pacific, with flat growth overall as a result.

Dell also saw shipments decline, with growth falling 10.9%, as did Acer, which particularly suffered from poor mini notebook shipments, with overall decline in growth of 31.3%. Asus suffered a 19.2% drop in growth.

"Although the reduction in shipments was not a surprise, the magnitude of the contraction is both surprising and worrisome," said David Daoud, IDC research director, Personal Computing. "The industry is going through a critical crossroads, and strategic choices will have to be made as to how to compete with the proliferation of alternative devices and remain relevant to the consumer. Vendors will have to revisit their organizational structures and go to market strategies, as well as their supply chain, distribution, and product portfolios in the face of shrinking demand and looming consolidation."

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