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CUSTOMER RELATIONSHIP MANAGEMENT NEWS. UPDATED 9 MINUTES AGO.
You are here: Home / Sales & Marketing / PC Sales Fall as Consumers Shift
PC Shipments Decline as Consumers Shift Focus
PC Shipments Decline as Consumers Shift Focus
By Mark Long / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
APRIL
14
2011
Worldwide PC shipments in the first quarter declined in comparison to the same period last year, with Gartner pegging the slide at 1.1 percent and IDC at 3.2 percent. Though PC sales are always expected to be seasonally slow in the first quarter, Gartner said the latest results point to market sluggishness.

Despite the availability of consumer PCs at low prices, demand for computing products in traditional form factors has slowed. Instead, consumers have turned their attention to media tablets and other consumer electronics, noted Mikako Kitagawa, a principal analyst at Gartner.

"With the launch of the iPad 2 in February, more consumers either switched to buying an alternative device or simply held back from buying PCs," Kitagawa explained. "We're investigating whether this trend is likely to have a long-term effect on the PC market."

A Shift of Focus

Demand for the new iPad 2 far exceeded supply during the first quarter, which suggests to Piper Jaffray that an open growth opportunity lies ahead for Apple in 2011 and 2012. "We called 10 Apple stores on April 12 and eight were completely sold out of iPad 2s while the other two had very limited selection," Piper Jaffray analysts Gene Munster, Michael Olson and Andrew Murphy noted Thursday.

Still, "other factors -- including extended PC lifetimes and the lack of compelling new PC experiences -- played equally significant roles," noted IDC Vice President Bob O'Donnell. Though buyer frugality tinged with a shift of focus to alternate form factors will continue to be the norm in the quarter currently under way, O'Donnell thinks the U.S. and worldwide PC markets should start to improve in the second half of the year.

On the other hand, PC vendors can no longer count on mini-notebook sales to help lift their PC shipment numbers. DisplaySearch expects mini-notebook shipments to fall 20 percent to 25.4 million in 2011 even as tablet shipments rise to 52.4 million.

"The mini-note market is falling rapidly as brands are looking to exit the mini-note segment and invest in the latest high-growth segment -- tablet PCs," said DisplaySearch analyst Richard Shim on Wednesday.

Articulating a Message

The long-term future of the traditional PC market will hinge on whether hardware manufacturers are able to articulate a message that sparks consumer interest, noted IDC Senior Research Analyst David Chou.

"'Good-enough computing' has become a firm reality, exemplified first by mini-notebooks and now media tablets," Chou said. "The real question PC vendors have to think hard about is how to enable a compelling user experience that can justify spending on the added horsepower."

Hewlett-Packard, Acer and Dell all registered shipment declines during the first quarter in the global and U.S. markets, according to Gartner. HP's 3.5 percent decline in the U.S. was comparable to the company's 3.4 percent global slide. At Acer, the U.S. decline was 12.1 percent and the global decrease was 12.2 percent. However, U.S. shipments at Dell declined a steep 24.9 percent versus just 2.2 percent on a global basis.

By contrast, Toshiba racked up 10.9 percent year-over-year growth in U.S. PC shipments, which Kitagawa attributed in part to Toshiba's strategy of downplaying the importance of the netbook segment. "As a result, Toshiba was not hit by the steep [shipment] decline in the mini-notebook market," she said.

Apple also saw its U.S. computer shipments grow 18.9 percent year over year during the first quarter. "iPad popularly pulls consumers to Apple's shelf space and the Apple stores so that more consumers have a chance to touch and experience not only iPad, but also Mac," Kitagawa said. "But for this quarter, I think the big contributor was the MacBook Pro refresh, which helped to boost Mac shipments."

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