Falling PC sales: From bad to worse

Worldwide PC sales were down 9.6 per cent year-on-year during the first quarter of 2016 according to Gartner. Total sales for the quarter were a shade under 65 million. This was the first quarter with less than 65 million units sold since 2007. In contrast, sales in the same quarter of 2013 were a little over 76 million.

Gartner’s falling PC sales numbers are optimistic compared to IDC which put the figure at 60.6 million units sold, down 11.5 per cent on the same period a year earlier.

Both analyst companies say Lenovo remains the world largest PC maker. IDC gives it a 20.1 per cent market share, Gartner puts the figure at 19.3 per cent. Lenovo’s sales fell slower than the overall market.

HP down 9 per cent

Number two brand HP saw sales fall 9 per cent, while third-place Dell was stable. Gartner says its sales dropped 0.4 per cent while IDC put the drop at 2 per cent.

Asus and Apple are number four and five. Gartner has Asus a whisker ahead of Apple, IDC reverses the positions. Gartner thinks both companies managed to grow during the quarter, IDC disagrees.

The rest of the market slumped, depending on which set of numbers you prefer sales either fell 18.4 or 19.8 per cent. Either way, it’s a bloodbath.

Currency a red herring

Gartner thinks currency movements can explain the decline with PCs now more expensive outside of the USA. Maybe.

However, the figures point to the fifth year in a row of falling PC sales. Sales have dropped year-on-year in each of the last 12 quarters.

The recent quarter’s decline is the worst on record. Look beyond the top brands and you have to ask how long before computer makers exit the business. There is no apparent upside, no recovery in sight.

Earlier analyst forecasts looked forward to the arrival of Windows 10 fueling fresh sales. That was over a year ago and there was no bump, no up-tick.

Keep taking the tablets

You might explain some of the drop in PC sales by the rise in tablet sales. Incidentally, I wrote this blog post on an iPad Pro — a few years ago it would be a PC task.

About 100 million tablets are purchased each year. Some will have been purchased as laptop alternatives. Yet tablet sales are also falling. And, anyway, some hybrid devices that combine PC and tablet features are counted in the PC sales numbers.

The obvious explanation is that phone sales are killing PC sales. Not only do they suck up money that might otherwise be spent on PCs, in many cases, they deliver enough PC functionality for a sizable slice of the population. It turns out many people only bought PCs for mail, browsing, video calling and other simple tasks that work just fine on a phone.

Apple CEO Tim Cook has made a point of questioning why people still bother buying PCs. That’s an interesting statement given that Apple is one of the few companies to do well in PC sales in recent years. Perhaps, unlike Gartner and IDC he thinks MacBooks and iMacs don’t count as PCs. He suggests most would be better off buying an iPad.