PC sales expected to decline

It would be their first drop in more than a decade.

By Benzinga Oct 11, 2012 11:49AM

Image Source, Getty ImagesBy Louis Bedigian

After 11 years of growth, sales of PCs -- including notebooks, netbooks and desktops -- are expected to decline.

This revelation comes from three different researchers. In a report by IHS iSuppli (IHS), the researcher showed that worldwide PC shipments will contract this year by 1.2% to 348.7 million units. In 2011, 352.8 million units were shipped.

In another report, IDC found that worldwide PC sales declined by 8.6% in the third quarter. In the United States alone, shipments declined by 12.4%. Gartner (IT) published similar results.

"There was great hope through the first half that 2012 would prove to be a rebound year for the PC market," Craig Stice, a senior principal analyst for computer systems at IHS, said in a company release. "Now three quarters through the year, the usual boost from the back-to-school season appears to be a bust, and both AMD and Intel's third-quarter outlooks appear to be flat to down. Optimism has vanished and turned to doubt, and the industry is now training its sights on 2013 to deliver the hoped-for rebound. All this is setting the PC market up for its first annual decline since the dot-com bust year of 2001."

Gartner concurred with that assessment.

"Retailers were conservative in placing orders as they responded to weak back-to-school sales," said Mikako Kitagawa, a principal analyst at Gartner. "By the end of September, retailers were focused on clearing out inventory in advance of the Windows 8 launch later this month. On the professional side, there was minimum impact from Windows 8 in the quarter because the professional market will not adopt Windows 8 PCs immediately after the release."

"PCs are going through a severe slump," added Jay Chou, a senior research analyst with IDC's Worldwide PC Tracker. "The industry had already weathered a rough second quarter, and now the third quarter was even worse. A weak global economy as well as questions about PC market saturation and delayed replacement cycles are certainly a factor, but the hard question of what is the 'it' product for PCs remains unanswered. While Ultrabook prices have come down a little, there are still some significant challenges that will greet Windows 8 in the coming quarter."

Dell (DELL) and Hewlett-Packard (HPQ) are among the biggest companies enduring declines. In the third quarter, Gartner said, HP declined by 16.4% worldwide, while Dell dropped 13.7%. In the United States, the declines were even greater.

Domestically, Apple (AAPL) suffered as well. While the company released a brand-new version of the MacBook Pro and knocked $100 off the 13-inch MacBook Air, Apple still experienced a decline of 6.1%.

IDC's numbers are nearly on par with Gartner's, but there is one exception: IDC's research shows that Apple declined by 7%.

IHS did not provide any details regarding how individual corporations are performing.

Follow me @LouisBedigianBZ

More from Benzinga
Oct 11, 2012 2:43PM

Schools are supplying kids with iPads, even the teachers are using them, good for Apple, bad for Microsoft. I think that once this trend (schools with iPads) level off, then we'll see a stabilization of the PC market. I don't think the PC market will ever truly die. There isn't a laptop on the market that can compete with the raw power of a tower machine for heavy graphics and CPU loads.

Oct 11, 2012 2:41PM
these people using smart phones or whatever---give 5-10 years -like "dontneed2know"  they will be needing COKE BOTTLE eyeglasses.....& more wrinkles on their faces... HAPPY NEWS for optometrist & botox businesses.  For me, I like laptop.
Oct 11, 2012 2:40PM
The death of the PC has been predicted regularly for some time, particularly the table top version.  It hasn't happened and isn't going to happen and anyone with any sense knows it.  Maybe smart phones will steal a few sales, and maybe people will replace their old PC less often, but the PC won't go away in the near future.  The writer of this story must have been hard up for a subject, because this story is old and silly.
Oct 11, 2012 2:39PM
The invention of the Ipad = the soon to be death of the PC. This was easy to foresee. The PC will be going the way of the yellow pages.
Oct 11, 2012 2:38PM
No way,  I'll take a big ole clunky lightning fast connection with a PC over a smart phone any day.  I like my phone, but it just is not near as easy and fast as my PC with HSI connections.
Oct 11, 2012 2:37PM

Why not just use a tablet for it all.  I can talk to my phone using my software.  Why can't I talk through my tablet to someone through a VOIP (voice over internet protocal?).  And, it's not a good answer to say - we have way to many PC's left to cell - oh sorry "sell."


And, is anyone ever to going to figure out that there was a suplus "at and around Y2K" as "us lawyers like to say," because thousands of new computers were bought, software was bought  and it was not because Clinton's economic plan was so frigging sound!  Talk about the Teflon president. 


Oh, sorry I have to go "like" some Romney or Obama stuff on Facebook.  Social Network indeed.



Oct 11, 2012 2:35PM

No doubt about it.  People are using computers in different ways today than they did yesterday, and tomorrow will be different than today.  People are gravitating towards tablets - and smart phones - but eventually, the way that people work with computers will be mostly invisble, though voice activation.


Companies that do not understand these basics will quickly become obsolete.

Oct 11, 2012 2:32PM

This is about a technology slump, nothing more, nothing less.


People upgrade thier old PCs because of newer and/or better technology. We havent seen anything really new since the 64 bit OS, which allowed us to run more RAM then before. Micro-chip technology is still moving foward, but most lay people dont understand it.


Also, people are starting to realize that if you take care of your PC, and upgrade the software, drivers, etc, you dont need to buy a new PC every 2 years.


And businesses, the real "consumer" in the PC market, are cutting costs and laying people off.

Oct 11, 2012 2:27PM
Smart phones will never take over as long as men have big, fat, fingers.
Oct 11, 2012 2:23PM
Well, if those teeny tiny little "smart phones" are going to take over, then God Bless the Optometrist because he or she is going to make alot more money than they are now. 
Oct 11, 2012 2:14PM
It certainly looks like smart phones are going to take over.
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