Global PC market returns to positive growth

Worldwide PC shipments increased 2.6% in the second quarter of 2011 (2Q11), according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker.

The results are just short of IDC’s May projections for 2.9% growth and represent a combination of a hangover from the more than 20% growth in the first half of 2010 as well as competition from smartphones, other consumer products and pressure from lacklustre economic conditions. As in 1Q11, the United States and Western Europe were among the weaker regions, reflecting constrained demand in more mature markets, while emerging regions – particularly Latin America and Asia/Pacific (excluding Japan) - fared better.

“These preliminary results continue to reflect pressure from competing consumer and business products as well as cautious spending,” said Jay Chou, Senior Research Analyst with IDC’s Worldwide Quarterly PC Tracker. “Nevertheless, product refreshes and promotions in the second half of the year as well as easier year-ago data should boost growth in the second half of the year.”

“The US PC market continued to contract in 2Q11, largely as a result of three factors. The first is an ongoing contraction in the Mini Notebook (Netbook) market and related inventories. The second is the impact of 2Q10’s difficult-to-sustain 12% growth. And third, demand has softened as corporate buyers continue to focus on increasing share of their IT budget in new IT solutions such as cloud and virtualization, and consumer interest shifts to media tablets,” says Rajani Singh, Research Analyst, United States Quarterly PC Tracker.

“Given the weakness of 2H10, we expect a better market environment in 2H11 with mid-single digit growth rates in the third quarter’s back to school and fourth quarter’s holiday season.”

Regional outlook

Asia/Pacific (excluding Japan) – returned to double-digit growth of just over 12% as the market came in slightly above forecasts. A weak consumer market weighed down India, but other key markets like China continued their momentum to help offset this, despite the ongoing inflation challenges there.

Japan – The impact of the earthquake on PC buying proved to be limited, thus the market produced stronger results than expected, with 3% growth. Many commercial projects commenced as earlier fears of inventory shortage did not materialize. Coupled with continued average selling price (ASP) declines since the beginning of 2011, consumer shipments also fared better than expected.

United States – With a decline of 4.2% year over year, the market was still downcast from a combination of exuberant consumption a year ago and a tenuous economic recovery, but the quarter also marked substantial growth from 1Q11, and total shipments topped over 17.8 million.

Europe, Middle East, Africa (EMEA) – The EMEA PC market continued to contract in 2Q11, in line with IDC’s forecast, as sustained high levels of inventory prevented stronger sell-in, particularly in Western Europe, where budget cannibalization from media tablets and smartphones continued to contribute to weak consumer demand and slow stock depletion. However, Central and Eastern Europe (CEE) and the Middle East and Africa (MEA) continued to expand and enjoyed positive growth overall.

Vendor outlook

HP grew 3% compared to the second quarter of 2010. The vendor saw good growth in key emerging markets and also EMEA, but also had a slight drop in volume compared to the previous quarter.

Dell saw growth of 2.8% worldwide. It managed to slow the pace of declines in key markets compared to the first quarter, with good gains in key emerging markets.

Lenovo outpaced Acer Group to become the number 3 vendor worldwide. It continued to reap the results of its channel expansion in markets outside of Asia/Pacific, garnering notable gains in the U.S. and Japan. All regions saw positive growth and total volume increased by nearly 23% on the year.

Acer shipments continued to decline from a year ago, but at a slower pace than in the first quarter as the company was affected by a review of inventory handling, as well uncertainties from its recent management shake-up.

ASUS grew 6% to overtake Toshiba for the number 5 spot. While the vendor has had some difficulties adjusting for the decline in Mini Notebook PCs, it mainstream notebooks did well, especially in emerging markets.