PC market shrinks by 3.2% in Q1

Challenges aplenty

Market researcher IDC forecast growth of 1.5 percent for the global PC market in Q1 2011, but the figure ended up being -3.2 percent.

Getting it wrong by almost five percentage points must be pretty embarrassing for IDC, but it has pointed to a number of exceptional events that it couldn't have foreseen as mitigation, including the Japan earthquake and the situation in many Middle Eastern countries. On top of that there was a spike in many commodity prices and Europe continued to wrestle with its debt.

IDC will be consoled by the fact that its big rival - Gartner - didn't fare much better, having forecasted growth of thee percent but recording -1.1 percent. The two companies use different methodologies to compile their stats.

Market-specific factors focus primarily on consumer caution, which is manifesting itself in a focus on necessary replacements rather than secondary devices. This is resulting in sales of netbooks being especially hard hit, with either sales or at least awareness of tablets surely a factor.

"While the consequences of events in the Middle East and Japan remain unclear, these will surely be factors that will influence short term market performance for 2011," said Jay Chou of IDC. "Long-term success will depend on hardware manufacturers being able to articulate a message that is beyond simple hardware specifications.

"'Good-enough computing' has become a firm reality, exemplified first by Mini Notebooks and now Media Tablets. Macroeconomic forces can explain some of the ebb and flow of the PC business, but the real question PC vendors have to think hard about is how to enable a compelling user experience that can justify spending on the added horsepower."

"Weak demand for consumer PCs was the biggest inhibitor of growth," said Mikako Kitagawa of Gartner. "Low prices for consumer PCs, which had long stimulated growth, no longer attracted buyers. Instead, consumers turned their attention to media tablets and other consumer electronics. With the launch of the iPad 2 in February, more consumers either switched to buying an alternative device, or simply held back from buying PCs."

Pretty much all global PC growth came from the Asia/Pacific region, especially as that excludes Japan, which was already expected to contract sharply before the earthquake. That's reflected in the vendor stats, with Acer most exposed in EMEA - the worst region - and Lenovo the best represented in Asia/Pac.

Top 5 Vendors, Worldwide PC Shipments, First Quarter 2011 (Preliminary) (Units Shipments are in thousands)

Source: IDC Worldwide Quarterly PC Tracker, April 13, 2011

Preliminary Worldwide PC Vendor Unit Shipment Estimates for 1Q11 (Units)

Note: Data includes desk-based PCs, mobile PCs, including mini-notebooks but not media tablet such as the iPad.
Source: Gartner (April 2011)

Preliminary EMEA PC Vendor Unit Shipment Estimates for 1Q11 (Thousands of Units)

Note: Data includes desk-based PCs, mobile PCs, including mini-notebooks but not media tablet such as the iPad.
Source: Gartner (April 2011)