Services & Software

PC market limps along -- and that's better than expected

Shipments of PCs inched up just 2.3 percent in the first quarter, but that beat IDC's prediction, which had called for a small decline.

Hewlett-Packard remains the No. 1 PC seller. This is its HP Pavilion dm4-3090se Beats Edition, which launched in February.
Sarah Tews/CNET

Despite a weak economy and constraints in hard-disk supplies, PC shipments scored a gain of 2.3 percent last quarter compared with a year ago, according to IDC's Worldwide Quarterly PC Tracker.

Though nothing to brag about, the results surpassed the firm's February forecast of a drop of almost 1 percent.

IDC had anticipated a down quarter due to the sluggish economy, competition from mobile devices, and uncertainty about the impact of Windows 8.

The limited supply of hard-disk drives had some bearing on the industry but not as much as anticipated. Supplies have been constrained since last year when severe floods in Thailand affected key manufacturers. However, larger PC vendors were able to absorb the impact by managing existing inventory and soaking up price increases.

The industry is trying to reel in customers through such novelties as ultrabooks and all-in-one desktop PCs, IDC said. But consumers and businesses alike are focusing more on replacing existing computers than buying new ones. And many prospective buyers are awaiting the release of Windows 8 before deciding whether to dive in. However, IDC is eyeing a better climate ahead.

"History has shown that periods of slower growth are followed by recovery as improving technologies make replacements as well as new purchases increasingly compelling," IDC analyst Loren Loverde said in a statement. "As a result, we expect PC shipments to pick up significantly by the fourth quarter and beyond as HDD supply and pricing are normalized, Windows 8 is launched, and replacements pick up.

HP holds on to the top spot
Among the top five global vendors, Hewlett-Packard remained in first place with a gain in shipments of 3.2 percent.

Lenovo trailed in second place but saw the biggest increase of the top five with shipment growth of almost 44 percent. The company continued to expand in America and Europe but also gained traction in the Asia/Pacific region. Dell and Acer both witnessed a drop in shipments, but fifth-place Asus took in a gain of 22 percent with solid growth outside the United States.


The scoreboard was a bit different in the U.S. Though HP was again on top, Dell took second place, followed by Apple, Toshiba, and Acer. Among those five, only HP and Apple saw a gain in shipments.

"The U.S. PC market is likely to remain constrained at least until the launch of Windows 8, which is expected in the fourth quarter of 2012," Loverde. "We expect vendors, retailers, and channel partners to be working very hard this year to focus their product lines and their general operations as they prepare for the year-end holiday season, because that alone will likely determine if there is any growth at all in the U.S. market in 2012."

IDC's results were echoed by Gartner, which noted that first-quarter PC shipments sidestepped an expected decline.

Commenting on the results, J.P. Morgan analyst Mark Moskowitz pointed out that enterprise demand for PCs compensated for some of the weakness in the consumer market, especially during a quarter that's typically slow. But that situation can be precarious.

If large companies start to pull back on PC spending, he said, "the individual consumer is not likely to pick up the slack in demand."