NZ PC sales down 2.7% in Q2, better than global decline

IDC Research reports that New Zealand PC sales fell 2.7 percent in the second quarter of 2015 compared with the same period in 2014. This dip is modest compared to plummeting sales in some overseas markets

IDC senior market analyst Arunachalam Muthiah says 188,000 PCs were shipped during the first quarter of 2015. Shipments refer to computers leaving factories for distributors or retailers, a measure used for consistent and reliable comparisons. While not all shipments convert to sales, the figure represents a 2.7 percent year-on-year decline but is identical to the previous quarter. Muthiah says sales were 2.8 percent higher than IDC had forecast.

Down, down, deeper and down

New Zealand’s downturn is relatively mild. In contrast, IDC reported a sharp 25.6 percent decline in the Middle East and Africa PC market during the same period. Worldwide, IDC expects an 8.7 percent fall in PC shipments for 2015, while rival research firm Gartner—which includes tablets in its estimates—projects a 9.5 percent decline for the second quarter.

IDC’s data, focused only on PCs, shows a global drop of 11.8 percent in the second quarter—the steepest fall in two years—highlighting the ongoing decline of personal computers. The market peaked four to five years ago as the upgrade cycle extended from two, three, or four years to significantly longer periods. Many users find their current devices meet their needs, with little incentive to upgrade unless the hardware fails. Additionally, new versions of Windows no longer drive significant buying cycles.

Enter Lenovo

Lenovo’s entry into New Zealand’s consumer PC market helped soften the decline by increasing competition. Muthiah notes that strong government and education spending also buoyed sales. However, many PC refreshes that might have occurred in 2015 were brought forward to 2014 due to Microsoft ending support for Windows XP.

IDC forecasts a slight improvement in New Zealand PC sales for 2016, in contrast to worldwide projections of another decline, marking five consecutive years of falling sales. However, worldwide sales are expected to rebound in 2017 as commercial buyers re-enter the market.

Tablets can’t take the blame anymore

For years, analysts pointed to mobile devices, especially tablets, as a key factor behind falling PC sales. That explanation no longer holds water, as tablet sales are now declining faster than PCs. While smartphone sales are not yet in decline, their once double-digit growth has slowed.

Market leaders

HP remains the top PC brand in New Zealand, commanding 37 percent of the market—nearly two out of every five computers sold. Acer retains the second spot with an 18 percent market share. Apple slipped to fourth place as Lenovo’s consumer push allowed it to claim the third position; both brands hold around a 12 percent share. Meanwhile, Dell and Toshiba continue to see their market shares erode in an already shrinking market.

The PC market is in a long-term decline. While there may be occasional upticks or periods of stability, the industry has moved well past peak PC.