More bad news for the PC industry. Although 71 million units shipped in the third quarter of 2015, that number marks a year-over-year decline of almost 11 percent -- even worse than 9.2 percent decline analysts predicted.
These stats come from the IDC Worldwide Quarterly PC tracker. The bad news is in line with expectations that the third quarter would face challenging financial conditions as part of a transition period with Windows.
Indeed, the channel was focused on getting rid of Windows 8 inventory to make room for new models carrying Windows 10 and the new Intel Skylake processor, according to IDC. At the same time, vendors were working against currency exchange rates thanks to a stronger dollar.
"The PC market continues to contract as expected, but we remain optimistic about future shipments," said Jay Chou, research manager for IDC Worldwide PC Tracker. "While PC shipments will be hampered in the short run by the availability of a free upgrade to Windows 10, the improved PC experience across user segments should drive longer-term demand for new PC hardware that is expected to help stabilize the market in 2016 and beyond."
Is Microsoft at Fault?
Windows 10 doesn't seem to be totally to blame, however. Although many users went for the free upgrade rather than buying new machines, the accelerated period between Windows RTM (release to manufacturing) and the official retail release made it challenging for PC-makers to get new Windows 10 machines to market in the third quarter, IDC noted.
But there may be a bright spot -- sort of: The top four vendors -- Lenovo, HP, Dell and Apple -- performed better than the market average. All told, the top four only saw a 4.5 percent dip from the same period a year ago. That compares to a nearly 20 percent dip for the rest of the manufacturers.
"Still, there is some hope in the fourth quarter," said Linn Huang, IDC's research director for devices and displays. "New designs running Windows 10 and powered by Intel's new Skylake processors are coming to market and may represent the most compelling reason we've had in years for consumers to upgrade their PCs. Whether this compulsion translates into actual sales remains to be seen."
How Bad Is It?
By region, PC shipments in the U.S. totaled 17.3 million units, which is slightly down year-over year. HP leads the pack stateside, followed by Dell, with Apple coming in third. In Europe, the Middle East and Africa, though, vendors saw a double-digit decline while the Asia Pacific (save Japan) also saw a soft quarter. Japan fell below predictions.
By vendor, Lenovo sold 14.9 million units, down 5 percent from the year-ago period, while HP grabbed the number two spot globally. Dell, Apple and Acer round out the top five on a global scale.
We caught up with former IDC analyst Roger Kay, principal at Endpoint Technologies Associates, to get his take on the report. He told us it’s bad but it’s not a complete rout.
“Commercial entities are still buying PCs. The free upgrades are definitely hurting hardware sales, particularly among consumers,” Kay said. “And we'll see more consolidation over the next year or two.”
In fact, Kay is predicting some vendors will exit the industry as the financial pressure increases. But they aren’t likely to be U.S. vendors since companies from the states are the bright spot in the quarter.
“I'm sure the recovery played a role,” Kay said. “Windows 10 will drive commercial upgrade activity over the next year, but the holiday may be slow because of siphoning off of consumers by the high-mobility market -- smartphones, tablets, wearables -- uncertainty in financial markets, and the aforementioned free upgrades.”
Posted: 2015-10-11 @ 8:37am PT
There are aftermarket components now such as 8TB drives, 16GB ram modules (kits) and 22nm processors which come in at a good price point. Sure a total system still costs double or more than a regular PC for sale, however I don't see why manufacturers don't start offering these beefed up components as a baseline. The lineups are often so low end they just look completely lousy.
Posted: 2015-10-11 @ 12:53am PT
The reason PC sales are down is because the industry has shifted their focus to mobile devices and left the desktop computer to rot. My 7 year old PC is only marginally slower than what you can buy today for similar money. Unless you're running tons of programs at the same time, multiple cores aren't really that useful (unless of course someone designs software that can take advantage of it). When my motherboard fried, I decided to look around for a new PC, but couldn't really find anything that would be a big improvement over the old workhorse, so I just bought a new motherboard instead.
Until they start making devices that interface directly with the mind, I'm gonna keep using PCs, but if they want to get people to open their wallets, they gotta do a better job of improving them like in the old days.