PC Sales Have Now Fallen for Seven Years (Premium)

The PC market has now experienced seven years of decline, with PC sales hitting 259 million units in calendar year 2018, down 1 percent from the 261 million that were sold in 2017. The good news? We’re clearly past the years of calamitous drops, and 2018 even experienced a couple of quarters of growth.

“Just when demand in the PC market started seeing positive results, a shortage of CPUs (central processing units) created supply chain issues,” Gartner’s Mikako Kitagawa says, explaining the shortfall. “After two quarters of growth in 2Q18 and 3Q18, PC shipments declined in the fourth quarter [as it had in the first quarter].”

“Heading into the quarter there was industry-wide concern over processor shortages and rising economic tensions between the U.S. and China,” an IDC report noted, echoing the statement above. “The fourth quarter is typically oriented toward consumer promotions that help drive the industry's biggest quarter of the year, but the confluence of events in 2018 led to the lowest sequential growth for a holiday quarter since the fourth quarter of 2012.”

That both analyst firms cited CPU shortages is interesting: Intel warned about CPU shortages because of what it described as modest but unexpected growth heading into the fourth quarter. I called BS on that claim at the time. And it is rather astonishing to me that anyone could claim that last year’s sales shortfall was due to Intel not meeting demand for its chips. Did consumers find the PC section at Best Buy empty of PCs in the quarter? That seems unlikely.

Anyway.

When one considers that the PC market had previously shrunk for six years in a row, with literally every single quarter being a loss compared to the year before, it’s possible to view 2018 as a minor success, a near leveling-off of the shrinking that has been happening since 2011. At this time last year, I noted that the previous year’s decline, of 1.5 percent, was tiny. So a decline of 1 percent for 2018 is indeed an improvement. And since there was no major spike downward, we have a few years now in which things really do seem to be leveling off.

Here’s how 2018 broke down.

PC sales flat-lined in the first quarter, with 61 million units, a tiny, tiny gain over the 60.8 million sold in the year-ago quarter. In the second quarter, we saw our first truly good news in several years, with PC sales rising to 62 million units, up from the 60.8 million PCs sold the year before: That’s 1.9 percent growth. In the third quarter, PC sales again flat-lined, with 67.3 million units sold, down very slightly from the 67.6 million units sold a year earlier. And in the most recent quarter, PC sales fell 4 percent to 68.35 million units; in the year-ago quarter, PC makers sold 71.2 million units.

Nothing has shifted with the top PC makers: Lenovo remained the number one PC maker, with 16.7 million units sold in the fourth quarter, good for 24.4 percent market share. HP remained...

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