PC industry still moribund as shipments shrink by 4.5% in Q2

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Worldwide PC shipments totaled 62.4 million units in the second quarter of 2016 (2Q16), a year-on-year decline of 4.5%, beating the forecast of -7.4% by roughly 3%, according to analyst firm IDC.

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Improvement in channel inventories appears to have contributed to the stronger results, along with an easier year-on-year comparison and easing of component supply, IDC noted.

Unfortunately, IDC said these types of supply-side drivers don’t necessarily reflect a change in consumer purchases. Even PC channels remain fairly cautious following challenges over the past year, so the results are not likely to raise the forecast.

Nevertheless, improved inventory levels put the market on a better footing for the second half of the year, and the expiration of free Windows 10 upgrades may transition some users into buying new systems rather than updating older ones. Commercial evaluations of Windows 10 remain healthy and a near-term driver that could also be contributing to the relative strength in US shipments.

“The PC market continues to struggle as we wait for replacements to accelerate, along with some return of spending from phones, tablets, and other IT,” said Loren Loverde, vice president at IDC.

“Our long-term outlook remains cautions. However, the strong results in the US offer a glimpse of what the market could look like with pockets of growth and a stronger overall environment. It’s not dramatic growth, but it could push the market into positive territory slightly ahead of our forecast for 2018.”

“As expected, the start of the peak education buying season helped generate large Chromebook shipment volumes in the US,” stated Linn Huang, research director at IDC.

The Asia-Pacific (excluding Japan) market witnessed a decline in line with expectations. Weakness in consumer demand continued in most countries across the region: Ramadhan observance affected consumer spending, while high inventory inhibited new shipments.

Also, a number of commercial projects in India, Thailand, and the Philippines have been postponed until the next quarter.

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Vendor highlights

Lenovo remained the worldwide PC market leader, and continued its strong growth in the US market. However, shipments in other markets continued to decline, pulling down overall growth.

HP Inc. had a solid quarter, with growth returning to positive territory after a year of declines. The US led regional growth with a gain of 11.5% from last year as the company rebounded from a couple of soft quarters, but other regions also saw growth in positive territory.

Dell also had a productive quarter, with worldwide growth recovering to over 4%. Dell managed a strong recovery in Japan, while also driving solid growth in the United States, although EMEA continued to drag on overall results.

Asus also saw growth recover in 2Q16, benefitting from an easier year-on-year comparison. The vendor pulled just ahead of Apple for the number 4 spot in overall PC shipments.

Apple continues to face an increasingly competitive market as it awaits a refresh of its PC lineup. As a result, shipments experienced a decline from last year.

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