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PC Droop, HP (Not Lenovo) Top Dog

By Oonagh Reidy | Wednesday | 16/01/2013

PCs are on a downward spiral, says the second analyst in a week

Worldwide PC shipments fell 5% to 90.3 million in the fourth quarter according to analysts Gartner, who say the PC industry's problems "point to something beyond a weak economy."

"Locally, PC shipments in the Asia-Pacific totalled 29.9m in Q4, almost a 2% drop from same time in 2011 and the third quarter of decline. Earlier this week, analysts IDC told exactly the same story in its q4 global analysis.

Good news for HP, however, who regained the top spot in the global PC race in Q4, after being (controversially) surpassed briefly by Lenovo last quarter.

Although still on top (with 16.2% versus Lenovo's 15.5%), growth fell 0.5%, while its Chinese rival grew 8%. Asus too saw a rise of 6%, while Dell and Acer both fell.

Analysts said HP most likely gave up a certain margin level to make gains, and was successful in managing large retail deals targeting Microsoft's Windows 8 launch and holiday sales in selected regions.

Overall, vendors struggled to convince consumers to spend their cash on humble PCs, as opposed to 'must have' smartphones and tablets like the iPad and a slew of budget-friendly Android devices from Acer, Samsung and Asus.

"Lacklustre" Windows 8 devices that "missed the excitement of touch" and low cost tablets are also hurting PC sales, say Gartner. Analysts said there was uptake of very low priced notebooks as a part of mega holiday deals, but this uptake did little to boost holiday PC sales.

"Tablets have dramatically changed the device landscape for PCs, not so much by 'cannibalizing' PC sales, but by causing PC users to shift consumption to tablets rather than replacing older PCs," said Mikako Kitagawa, principal analyst at Gartner.

Tablets are quickly becoming the "primary consumption device," with just one shared PC per household.

"We increasingly suspect that most individuals will shift consumption activity to a personal tablet, and perform creative and administrative tasks on a shared PC," says Kitagawa.

There will be some exceptions but, in general, "buyers will not replace secondary PCs in the household, instead allowing them to age out and shifting consumption to a tablet."

"The Asia Pacific PC market remained weak, registering a 1.8% decline. Despite the Windows 8 launch, the shipments even declined sequentially from 3Q12," says Gartner's Singapore- based research director, Lillian Tay.

"The introduction of Windows 8 met with lukewarm response, and availability was primarily on the higher-end models, which were priced beyond the mainstream price point.Models at the value end, however, failed to revitalize any demand."

"However, its not all bad news for the PC sellers, with Gartner predicting a rise in prices.

"On the positive side for vendors, the disenfranchised PCs are those with lighter configurations, which means that we should see an increase in PC average selling prices (ASPs) as users replace machines used for richer applications, rather than for consumption."

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