Home Market China drop off pushes Asia Pacific PC shipments to decline
China drop off pushes Asia Pacific PC shipments to decline Image courtesy of Stuart Miles at FreeDigitalPhotos.net Featured

PC shipments in the Asia Pacific region are declining, especially in China where unit shipments have declined 5.7% year over year. The APAC decline comes as the global market declined for the 14th consecutive quarter dating back to the second quarter of 2012.

The top three vendors — HP, Lenovo and Dell — accounted for 56.9% of global PC shipments in the first quarter of 2018, compared with 54.5% of shipments in the first quarter of 2017. Worldwide PC shipments totalled 61.7 million units in the first quarter of 2018, a 1.4% decline from the first quarter of 2017.

And, Dell experienced the strongest growth rate among the top six vendors worldwide, as its shipments increased 6.5%.

In its latest report on the worldwide PC market, research firm Gartner says Asia Pacific and the US experienced declining shipments, while other regions saw some minimal growth. But it was not enough to drive overall growth for the PC industry.

{loadposition  peter}In the first quarter of 2018, PC shipments in Asia Pacific declined 3.9% compared to the corresponding period last year, while shipments in the US decreased 2.9%.

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"The major contributor to the decline came from China, where unit shipments declined 5.7 percent year over year," said Mikako Kitagawa, principal analyst at Gartner.

"This was driven by China's business market, where some state-owned and large enterprises postponed new purchases or upgrades, awaiting new policies and officials' reassignments after the session of the National People's Congress in early March.

"In the first quarter of 2018, there was some inventory carryover from the fourth quarter of 2017," Kitagawa said. "At the same time, vendors were cautious in overstocking due to the upcoming release of new models in the second quarter of 2018 with Intel's new eighth-generation core processors."

In China, Gartner says there is no significant sign of upgrading to the special version of Windows 10 by Chinese Government institutions, and consumer demand was weak as most buyers already took advantage of the aggressive promotions offered in the fourth quarter of 2017.

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Gartner reports that HP's worldwide PC shipments increased 2.8% in the first quarter of 2018 versus the corresponding period last year. In EMEA, HP recorded double-digit growth in both desktop and mobile PCs, which contrasted with a small decline in other regions.

According to Gartner, HP was adversely impacted by declining demand in the US, which generally accounts for one-third of its total shipments.

Lenovo's global PC shipments remained flat in the first quarter of 2018. Lenovo achieved 6% growth in EMEA and double-digit shipment growth in Latin America. However, Gartner reports that in Asia Pacific (its largest market), PC shipments declined 4%.

After record holiday sales for consumer and gaming products in the fourth quarter of 2017, Gartner said Dell continued to perform well in the first quarter of 2018.

With double-digit shipment increases in EMEA, North America and Latin America, Dell grew in all regions except Asia Pacific, and Gartner says desktop and mobile PCs grew in equal measures, “showing Dell's strength in the business segment”.

Gartner says the average selling prices (ASPs) of PCs continue to rise, as it acknowledged deceleration in the smartphone market, and uncertainty in PC replacement demand – with component companies remain cautious about expanding their production capabilities.

“Therefore, persistent component shortages and a rising bill of materials continue to create an environment conductive to higher prices,” the research firm notes.

"In contrast to other DRAM-related price spikes, PC vendors are not reacting by reducing DRAM content. Rather they have passed the cost increase to consumers," Kitagawa said. "With fewer people buying new machines, manufacturers need to get the highest profit margin from each sale. To do that, they are raising the selling points and focusing on customer experience or perception of value."

In the US, PC shipments totalled 11.8 million units in the first quarter of 2018, a 2.9% decrease from the first quarter of 2017. Dell moved into the No. 1 position in the US based  on shipments, as its market share increased to 29.1%. And HP moved into the No. 2 position as its shipments declined 4.8% , and its market share totalled 28.4%in the first quarter of 2018.

PC shipments in EMEA totalled 18.6 million units in the first quarter of 2018, a 1.7% increase year-over-year.

Gartner says enterprise shipments in EMEA increased as many Windows 10 projects that were put on hold in 2017 began to be implemented.

“The fast approach of the compliance deadline for the General Data Protection Regulation in Europe, as well as earlier reports of cyber security breaches, made security a strong priority in the hardware refresh cycle among enterprises. Eurasia continued to be a bright spot for EMEA, as several countries, such as Russia, Ukraine and Kazakhstan, saw strong demand in the first quarter of 2018,” it said.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

 

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