Both Gartner and IDC are out this afternoon with their estimates for the worldwide PC markets throughout the first quarter of 2018. As is usually the case, there are some discrepancies between the numbers from each, with both telling a different story about Apple…
First off, IDC’s data indicates that the overall PC market was flat during the first quarter of 2018, coming in at 60.4 million shipments. This beats expectations as the market was originally expected to decline by 1.5 percent. More specifically, IDC says the U.S. market saw “modest growth” following six consecutive quarters of decline.
On a company level, HP came in as the top seller with 4.3 percent growth and 21.7 percent of the market. Lenovo held steady at second with 20.4 percent marketshare, while Dell locked in 15.9 percent at third place. Acer dropped by 7.7 percent in terms of shipments, falling to 7.3 percent marketshare.
Rounding out the top 5, according to IDC, is Apple with 7 percent of the market share and 4 million shipments. That number of shipments is down 4.8 percent year over year.
Meanwhile, the data from Gartner tells a slightly different story. The company estimates a 1.4 percent decline for the worldwide PC industry as a whole, with shipments totaling 61.7 million units. Gartner attributes this to slowing shipments in Asia:
“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.”
Gartner’s data shows a similar top three, with HP, Lenovo, and Dell holding strong. Apple, however, is ranked above Acer here, with Gartner’s data showing a 1.5 percent increase in shipments for Apple to 4.264 million.
Ultimately, data from Gartner and IDC should be treated with skepticism, especially as it relates to Apple. The company has yet to report its earnings for the quarter – it will do so on May 1st – which means there could be some discrepancy in numbers.
View the full reports from each company below:
Gartner Says Worldwide PC Shipments Declined 1.4 Percent in First Quarter of 2018
Worldwide PC shipments totaled 61.7 million units in the first quarter of 2018, a 1.4 percent decline from the first quarter of 2017, according to preliminary results by Gartner, Inc. The PC market experienced a 14th consecutive quarter of decline, dating back to the second quarter of 2012.
Asia/Pacific and the U.S. experienced declining shipments, while other regions saw some minimal growth, but it was not enough to drive overall growth for the PC industry. In the first quarter of 2018, PC shipments in Asia/Pacific declined 3.9 percent compared with the same period last year, while shipments in the U.S. decreased 2.9 percent.
“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,” Ms. 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.”
The top three vendors — HP, Lenovo and Dell — accounted for 56.9 percent of global PC shipments in the first quarter of 2018, compared with 54.5 percent of shipments in the first quarter of 2017 (see Table 1). Dell experienced the strongest growth rate among the top six vendors worldwide, as its shipments increased 6.5 percent.
HP Inc.’s worldwide PC shipments increased 2.8 percent in the first quarter of 2018 versus the same period last year. In EMEA, HP Inc. recorded double-digit growth in both desktop and mobile PCs. This was contrasted with a small decline in other regions. HP Inc. was adversely impacted by declining demand in the U.S., 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 percent growth in EMEA and double-digit shipment growth in Latin America. However, in Asia/Pacific (its largest market), PC shipments declined 4 percent.
After record holiday sales for consumer and gaming products in the fourth quarter of 2017, 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. Desktop and mobile PCs grew in equal measures, showing Dell’s strength in the business segment.
Rising ASPs
The average selling prices (ASPs) of PCs continue to rise. Acknowledging deceleration in the smartphone market, and uncertainty in PC replacement demand, 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.
“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,” Ms. 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.”
Regional Overview
In the U.S., PC shipments totaled 11.8 million units in the first quarter of 2018, a 2.9 percent decrease from the first quarter of 2017. Dell moved into the No. 1 position in the U.S. based on shipments, as its market share increased to 29.1 percent. HP Inc. moved into the No. 2 position as its shipments declined 4.8 percent, and its market share totaled 28.4 percent in the first quarter of 2018 (see Table 2).
PC shipments in EMEA totaled 18.6 million units in the first quarter of 2018, a 1.7 percent increase year over year. Enterprise shipments 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 (GDPR) in Europe, as well as earlier reports of cybersecurity 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.
PC shipments in Asia/Pacific totaled 21.9 million units in the first quarter of 2018, a 3.9 percent decline from the first quarter of 2017. As previously mentioned, the PC market in China drove the decline in Asia/Pacific. There is no significant sign of strong upgrading to the special version of Windows 10 from the Chinese government institutions. Consumer demand was weak as most buyers already took advantage of the aggressive promotions offered in the fourth quarter of 2017.
These results are preliminary. Final statistics will be available soon to clients of Gartner’s PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe.
Traditional PC Market Exceeds Expectations with Flat Year-on-Year Shipment Growth, According to IDC
FRAMINGHAM, Mass., April 11, 2018 – Worldwide shipments of traditional PCs (desktop, notebook, and workstation) totaled 60.4 million units and recorded flat (0.0%) year-on-year growth in the first quarter of 2018 (1Q18), according to the International Data Corporation (IDC) Worldwide Quarterly Personal Computing Device Tracker. The results exceeded the earlier forecast of a 1.5% decline and marks the third consecutive quarter where traditional PC shipment volume has hovered around flat growth year on year.
Although the numbers are preliminary, the data seems to indicate a continued build up in commercial renewal activity as the main driver for the stabilizing trend. Business uptake of Windows 10 systems appear to be steadily ongoing, benefitting commercially-focused PC OEMs such as HP, Dell, and Lenovo. Demand for premium notebooks in both the consumer and commercial segments have also helped major vendors retain better margins and garner buyer interest. Furthermore, continued focus on gaming systems has injected slight improvement in pockets of the consumer space. Unlike the first quarter of 2017, an improved supply of key notebook components also loosened pressures on both supply and pricing, leading to some recovery of share for the smaller vendors.
From a geographic perspective, mature markets uniformly fared positively. The U.S. market saw modest growth after six quarters of year-on-year declines and Japan continued with its seventh consecutive quarter of growth. Emerging markets were more of a mixed bag as Asia/Pacific (excluding Japan) (APeJ) shrank for the quarter while Latin America continued to recover positively against a tough 2017.
“The component shortage that initially impacted portions of 2017 led some vendors to stock up inventory to avoid expected component price hikes, and that led to some concerns of excess stock that would be hard to digest in subsequent quarters,” said Jay Chou, research manager with IDC’s P ersona l C omputing Device Tracker. “However, the market is continuing on a resilient path that should see modest commercial momentum through 2020.”
“The year kicked off with optimism returning to the U.S. PC market, especially on the notebook side,” said Neha Mahajan, senior research analyst, Devices & Displays. “A likely rise in commercial activity amidst a positive economic environment is expected to further strengthen demand. The retail platform too shows signs of stability especially with a fast-growing gaming community adding to the confidence.”
Regional Highlights
The USA market saw a promising opening quarter for the year with almost all major vendors reporting increases in notebook sales. Overall, total PC shipments for 1Q18 stood at 13.5 million units.
In Europe, the Middle East and Africa (EMEA), the traditional PC market showed stable growth for the quarter, benefiting from a positive performance across both product categories. Continued mobility adoption and increased customer awareness of the value proposition of more premium devices enabled notebooks to maintain a growth trajectory. On the other side, desktops posted strong results, driven by the growing gaming market as well as long-awaited commercial device refreshes in certain sub regions.
The APeJ traditional PC market ended the quarter slightly short of expectations. India and Indonesia showed better than anticipated results, but the PC market in China performed below forecast with shipments weakened by a smaller number of promotions in the consumer segment and softer demand from the public sector.
The Japan commercial market was a couple points below expectations due to slowing of the momentum seen in 4Q17, but it still maintained healthy growth in 1Q18. The consumer segment was slightly better than the previous quarter in term of growth, but IDC believes shipments during the first three quarters of 2017 affected future demand, causing growth to decelerate in 4Q17 and after.
Company Highlights
HP Inc. maintained a comfortable lead over all others in the market with its eighth consecutive quarter of overall growth (up 4.3% year on year) and growth in all regions except Latin America.
Lenovo saw a flat quarter in 1Q18, the third consecutive quarter in which the company saw year-on-year volume stabilize with flat global growth and a slower pace of decline in the U.S.
Dell Inc. posted the strongest year-on-year growth out of all the major companies, growing 6.4% and buoyed by strong performances in nearly every region.
Acer held onto the fourth position. Its ongoing expansion into gaming and continued investments in Chromebooks have paid dividends for the company, but also caused some tough going in other arenas.
Apple finished the quarter in the fifth position with a year-on-year decline in shipments of 4.8%.
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