PC sales worse than expected in Q2 – but Apple outperforms market

PC sales were worse than expected in the second quarter of 2015 due to weakening demand and high inventory levels, according to preliminary results.

PC shipments in EMEA reached 18.6 million units in Q2, a 15.7 per cent decline from Q2 2014, reports Gartner.

The analyst said in a statement: "In Europe, vendors spent most of the quarter trying to manage already high inventory levels. They tried clearing that inventory with promotions, having to absorb this with lower margins. But in the third quarter of 2015, vendors should see better "sell-in" into the channel with new Windows 10-based devices."

IDC made a similar point, saying: "In EMEA, weakening demand and high inventory levels inhibited sell-in, driving results below expectations. Vendors continued to clean stock ahead of the back-to-school season and Windows 10 launch.

"Moreover, unfavorable exchange rates led to increasing prices and continued to affect demand both in the business and consumer spaces. The commercial market also faced a difficult year-on-year comparison with 2Q14, when the end of support for Windows XP boosted sales."

Lenovo, HP and Dell were the top three vendors in Q2 respectively, in terms of unit shipments, but they all saw declines.

However, Apple continued to outperform other vendors, with growth of 16.1 per cent globally.

"The vendor has largely avoided the price competition affecting other players and may be benefitting from some of the uncertainty around the launch of Windows 10, along with refreshed products like the 12-inch MacBook and a relative concentration of shipments in the US," said IDC in a statement.

Globally, PC shipments reached 68.4 million in Q2 2015, a 9.5 per cent decline year-on-year according to Gartner – the steepest PC shipment decline since the third quarter of 2013. PC shipments are projected to decline 4.4 percent in 2015.

IDC on the other hand said PC shipments reached 66.1 million units during the period, a year-on-year decline of 11.8 per cent, about one percent below projections for the quarter.

Gartner said the drop was due to three reasons.

"The price hike of PCs became more apparent in some regions due to a sharp appreciation of the U.S. dollar against local currencies," said Mikako Kitagawa, principal analyst at Gartner.

"The price hike could hinder PC demand in these regions. Secondly, the worldwide PC market experienced unusually positive desk-based growth last year due to the end of Windows XP support. After the XP impact was phased out, there have not been any major growth drivers to stimulate a PC refresh.

"Lastly, the Windows 10 launch scheduled for 3Q15 has created self-regulated inventory control. PC vendors and the channels tried clearing inventory as much as possible before the Windows 10 launch."

However, Gartner did say these were temporary events, and do not change the PC market’s structure.

"Therefore, while the PC industry is going through a decline, the market is expected to go back to slow and steady growth in 2016," Gartner added in a statement.

Loren Loverde, VP for worldwide PC trackers and forecasting at IDC, added: "We continue to expect low to mid-single digit declines in volume during the second half of the year with volume stabilizing in future years.

"We’re expecting the Windows 10 launch to go relatively well, though many users will opt for a free OS upgrade rather than buying a new PC. Competition from 2-in-1 devices and phones remains an issue, but the economic environment has had a larger impact lately, and that should stabilize or improve going forward."

Gianfranco Lanci, president and chief operating officer at Lenovo, commented: "Lenovo is gratified to see continued growth of our market share in our core PC business, which is a strong, powerful growth engine for the company.

"PCs are still the heart of our business, and we have ample opportunity for continued growth there. Meanwhile, our strength in PC fuels the rest of our strategy – building new growth engines in enterprise, mobility and ecosystem, and transforming ourselves from a company that simply sells devices to a one that builds enduring customer relationships through unique products that bring hardware, software and cloud services together in compelling, easy to use experiences. That is our focus as we look ahead, and continuing to win in PCs is key to delivering on this vision."

IDC data:

Gartner data:

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