Are PCs going the way of the dodo or dinosaur? If you follow PC shipment trends, it would be understandable why you may think so. Now, IT consulting company Gartner has reported that worldwide PC shipments have declined for the fifth consecutive year, this time to 76 million units in the second quarter of 2013, a 10.9% decrease from the same period last year.

The company noted that this also marks the longest duration of decline in the PC market’s history. To our mind, it raises the more worrisome question whether the PC market is in a steady downward spiral, and when, or rather whether, it could make a recovery back to glory.

The culprit of this decline comes as little surprise, as it is tablets that are unseating the former kings of the computing world.

Tablets: cure or curse?

According to Gartner’s principal analyst, Mikako Kitagawa, the PC market’s decline can be directly attributed to the shrinking installed base of PCs. She elaborated that  inexpensive tablets are displacing the low-end machines used primarily for consumption in mature and developed markets.

“In emerging markets, inexpensive tablets have become the first computing device for many people, who at best are deferring the purchase of a PC. This is also accounting for the collapse of the mini notebook market,” she explained.

What’s more, it seems that the PC market decline is not a regional phenomenon, but rather, happening globally. According to Gartner all regions showed a decline compared to a year ago. The company elaborated that the fall in the Asia/Pacific PC market continued, showing five consecutive quarters of the shipment decline, while the EMEA (Europe, Middle East, Africa) PC market registered two consecutive quarters of double-digit decline.

Winners and losers

Gartner then drilled down how this downward trend played out with various manufacturers, indicating that some fared slightly better than others. Indeed, it noted that HP and Lenovo's neck-and-neck competition continued, this time, though with Lenovo claiming the top position.

However, Gartner pointed out that Lenovo was also showing mixed regional results, as it reportedly experienced strong growth in the Americas and EMEA, while showing a major decline in Asia/Pacific.While HP fell slightly behind Lenovo with regards to market share, Gartner pointed out that HP is still a market leader in key regions including the US, EMEA and Latin America. While Asia/Pacific had been a weakness the last three years for HP, Gartner noted that its preliminary second quarter results suggest an improvement of their performance in that region.

For Dell’s part, while its shipments declined compared to a year ago, the bright spot was that its second quarter of 2013 results showed a smaller decrease than the past several quarters. What’s more, Dell showed good growth in the US and Japan, even as it was apparently struggling to increase shipments in Asia/Pacific and EMEA.

Gartner continued that both Acer and Asus showed steep declines compared to the second quarter last year – a decline that the company asserted was partly affected by their strategies to exit the mini-notebook market.

Closing Windows, opening doors

Interestingly enough, Gartner did not place such a burden of the PC market’s decline in the US on Microsoft’s shoulders.

“While Windows 8 has been blamed by some as the reason for the PC market’s decline, we believe this is unfounded as it does not explain the sustained decline in PC shipments, nor does it explain Apple’s market performance,” said Kitagawa.

She explained that, in the US market, PC shipments totalled 15 million units in the second quarter of 2013, a 1.4% decline from the second quarter of 2012. This decline was less than the past seven quarters, and the market grew 8.5% sequentially.

“Our preliminary results indicate that this reduced market decline was attributed to solid growth in the professional market,” continued Kitagawa. “Three of the major professional PC suppliers, HP, Dell and Lenovo, all registered better than US average growth rate. The end of Windows XP support potentially drove the remaining PC refresh in the U.S. professional market,” she explained. 

What about here?

Closer to home, PC shipments in Europe, Middle East and Africa (EMEA) were weakened in the second quarter of 2013, with a 16.8 % decline over the same period last year, marking the fifth consecutive quarter of decreasing shipments.

“The sharp decline in the second quarter of 2013 was partly due to the shift in usage patterns away from notebooks to tablets, and partly because the PC market was exposed to inventory reductions in the channel due to the start of the transition to new Haswell-based products,” said Isabelle Durand, principal research analyst at Gartner. “Touch-based notebooks still account for less than 10% of the total consumer notebook shipments in the last quarter,” she added.

And yet, it seems as though in our region of the world, some are enduring the PC shipment decline better than others. According to Gartner, despite the steep shipment decline, HP retained the top position in EMEA due to better results in the professional PC market.

Lenovo was the only top five vendor to exhibit shipment growth, recording a fourth consecutive quarter of growth and taking second place in the EMEA PC vendor rankings in the second quarter of 2013. Alas, Gartner noted that Acer exhibited the worst performance of the second quarter, with a shipment decline of 38.5% year-on-year.

To the point

In the final analysis though, it seems that it would be premature to call it the end times of the PC, but it would be no understatement to say that for PCs, and all manufacturers who play in that domain, the future is certainly uncertain. This is also the reason why, we suspect, so many manufacturers have such a clear and vibrant focus on tablet development.