The PC Market Decline Continued in Q2 2017

Posted on July 13, 2017 by Paul Thurrott in Hardware, Mobile, Windows 10 with 29 Comments

The PC Market Decline Continued in Q2 2017

According to industry analysts from Gartner and IDC, the PC industry continued to decline in the most recent quarter. But there are bright spots, especially for HP, which has regained its number one position and has experienced five straight quarters of growing unit sales.

PC makers sold 60.8 million PCs worldwide in Q2 2017, a decline of 3.8 percent year over year (YOY).

You may recall that last quarter, PC makers almost bottomed out, hitting a 1 percent decline YOY. There was some hope that the quarter would mark the long-awaited rebound, as PC sales have now declined for over five years.

So that didn’t happen. But it also didn’t happen this quarter. So what’s going on?

IDC says that the “traditional PC market,” as they’re suddenly calling it—or, “desktops, notebooks, and workstation,” but not tablets—was impacted somewhat by parts inventory buildup, leading to rising PC prices. And Gartner agreed, noting that “component shortages for DRAM, solid state drives (SSDs) and LCD panels had a pronounced negative impact on PC demand.”

I’m still looking for the light at the end of the tunnel. But the central question is unchanged: Does the PC market bottom out at some level, apparently still unknown? Or does it continue a long, steady decline?

In the good news department, HP continues its upward trajectory, thanks, I’m sure, to the stellar PC designs that the company continues to pump out. HP sold 13.24 million PCs in the quarter, good for 21.78 percent of the market. That’s a gain of 4.75 percent, which is the strongest growth experienced by the biggest PC makers.

Lenovo was again in second place, with 12.3 million units sold, a decline of 7 percent. Lenovo controls about 20.2 percent of the worldwide PC market.

Dell, Apple, and ASUS accounted for the remainder of the top five, with ASUS experiencing a massive, double-digit decline.

Interestingly, Gartner does not include Chromebooks in its tally—it should—but it notes that “the [PC] education market was under pressure from strong Chromebook demand,” and that Chromebooks are growing, while PCs are not. Worldwide Chromebook shipments grew 38 percent in 2016, while the overall PC market declined 6 percent, it says.

 

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Comments (31)

31 responses to “The PC Market Decline Continued in Q2 2017”

  1. Avatar

    Martin Pelletier

    And they don't include some one like me that build his own PC like many gamers that we are :)

    • Avatar

      Narg

      In reply to MartinusV2:

      You're in a surprisingly small market... Yeah, it may look big, but it's really not.

    • Avatar

      dfeifer

      In reply to MartinusV2:

      I have actually done this personally twice now over the last 2 months. ryzen 1800x 32gig ddr4 3200 on an msi titanium for myself and walked my sister through building her first system. she has always been oem before now.


      I have said this before but I still believe the primary issue with the desktop market is that nothing has really come out over the past 4 years or more that really Forces or provides a good reason for someone to want to replace thier computer. Seeing as most of the programs that the average user use are not multithreaded multicore apps updating the systems (adding a little more ram, replaceing the old hdd with an ssd and installing windows 10 in the shop) generally is enough to make them feel like they have a new computer.

    • Avatar

      Sprtfan

      In reply to MartinusV2:

      unless there was a large shift of people that starting building there PC instead of buying from an OEM, the % drop is still representative

  2. Avatar

    CaedenV

    Honestly, I am rather supprised that the 'traditional PC' market is doing so well.

    1) We are accustomed to very heavy deflationary forces in the PC market, and yet CPUs, Mobos, RAM, cases and HDDs have largely stagnated in price for the last 5-6 years. Far better parts are available now... but rather than replacing previous parts the $/performance is largely the same and you end up with far higher tiers available to choose from rather than cheaper chips. GPUs and SSDs have continued to improve, and (to some extent) displays, but for an average PC these are not the parts that add the bulk of the cost as desktops tend not to come with displays, and most machines still do not use dGPUs or SSDs (the SSD thing is a crime at this point lol). So if the same money buys the same machine that you had 3-5 years ago when you are accustomed to at least a doubling in performance for the same price... you start to think twice about what you purchase.


    2) In the 2000's we were dealing with a rash of bad parts. People upgraded every 2-3 years in part because you could get such a better machine for the same price... but these parts were generally useless on the secondary markets because the mobo or PSU was pretty much doomed for failure at that point. Around 2008-9 QC finally got a handle on it and now HDDs generally die after 5 years of constant use... but everything else can last an easy 10-15 years and still function. Combine that with point 1 of fewer deflationary effects and you end up with more retained value in old parts and a huge market of used computers that eats a lot of what would otherwise be new sales.


    3) The eternal question with these sorts of things is 'what is a PC'? As mobile OSs continue to improve over time there is less and less difference between a tablet or phone compared to the functionality of a traditional laptop or desktop... especially when you add external keys and mice to the equation. I don't, but could easily dock my phone to a keyboard, mouse and monitor and remote into my work PC and get a very 'PC-like' experience without a single physical PC being involved (because my work PC is a VM). Additionally, a Chromebook is a PC... I mean, it is essentially PC hardware, and the OS has about as much funcitonal crossover with Windows as an Apple device... so ya... those should absolutely be included in these numbers. Newer tablets like the iOS 11 iPad Pro is increasingly PC-like as well and should also be considered.

    And I think that is largely the point. The 'PC Expierence' is not going away even if the PC hardware does. My kids will never have gaming desktops, because it increasingly makes far more sense to purchase a used 4U server, load it up with GPUs, and assign those to VMs. My kids may just have a tablet or some other future device, but will have full access to a traditional PC environment with PC software, and PC storage capabilities, and PC content creation capabilities, while never owning a PC. The PC experience becomes virturalized, even while the PC hardware goes away.


    Anywho,

    just my 2 cents

  3. Avatar

    normcf

    Gartner does not include Chromebooks, but IDC does. What does it mean if IDC says the PC market shrunk 3.3% and Chromebook and mac sales both grew? It means that windows sales shrunk even further than 3.3%. I would also like to see the breakdown between business, education and consumer. In the past, the bulk of the decreases have been to the consumer.

    • Avatar

      Jorge Garcia

      In reply to normcf:

      Windows is horrific to average people. Add to that the lack of Apps, and it is toast outside of Businesses. And it doesn't help that MS has now become dishonest. I have an Android tablet that I use every day, but have never used the OneDrive App on it. When I opened the App, it promised me 3GB of extra space if I simply turned on Camera Upload, well I did, I took some pictures, and nothing. MS support told me the manufacturer was to blame, which is complete BS, the offer was in the App itself. (Dropbox honors all its offers immediately, even older ones).

  4. Avatar

    Jorge Garcia

    It also doesn't help that it's 2017 and you go into Best Buy to buy a laptop so that you can do some "stuff" on a larger screen and not waste your phone's battery so much, and save for the Apple section, ALL you are greeted with is a sea of Windows machines, as if it were 1997 or 2007!. Due to mobile OS's, normal people have now experienced what "PLEASANT" computing can actually be like, so there's NO way they'll voluntarily spend money on a Windows machine, especially once they find out all the stuff that isn't in the windows store. (mind you, I personally LOVE Windows, for the most part,but I'ma colossal geek). And I know that I'm hated by some for making this one point over and over again, but GOOGLE had the chance to take android to the big screen and they failed to do so, betting big on awesome (yet dumb and weird) ChromeOS instead. That gave Windows laptops an undeserved new lease on life, that they continue to enjoy. Perhaps someday Google will get their act together and deliver a laptop experience people actually want.

  5. Avatar

    Jules Wombat

    Why the sad commentary ? Its called progress. Peoples use cases have moved on.

    In other news, the number of horse journeys declined in the 1920s, because more people started using cars.

  6. Avatar

    openmisere

    I think the title of this article is not helpful, and its probably inaccurate. The PC market did not decline. What did decline is the number of PC's sold. Words are important and these are not the same statements.


    PC's used to be mediocre quality hardware (at best) that needed to be replaced every couple of years, especially as new technology developed. Now PC's are not terrible - indeed many of them are very good - and many of them do what they need to do for many years and therefore don't need to be replaced so regularly. This in itself doesn't say anything about good or bad about the usage of PC's in the world; it only says something about PC sales.


    The other headline that bothers me is what people write about charts like this => http://gs.statcounter.com/os-market-share . This chart in itself does not mean that the PC market is declining; at least not in absolute terms. What is does show is that PC usage is declining relative to the fast growth of usage of Android devices.


    I would hypothesize that the size of the global install base of PC's continues to increase year on year in absolute terms, but I don't know where to find the data to prove or disprove this. I'm sure it must be available somewhere though? Can anyone suggest where?

  7. Avatar

    matsan

    Shortage of components should lead to lower shipment, not lower demand, right?

    I'd say that the decline is due to longer life of the computers, mainly because of Windows 8.1 and later that doesn't bog down the computer.

  8. Avatar

    Darmok N Jalad

    There's sales, and then there's usage. Has the number of active Windows installs gone down? I would maintain that computers just don't need to be upgraded as often anymore. I think iPad is also in this boat. People don't feel the need to upgrade as often--I think smartphones have taken that space. Those devices see more abuse and have seen more advancements, so the available spending is going there.


  9. Avatar

    Minok

    In the likely definition of PC Market that the are using, this is not surprising.

    PCs are from a computing sense - inclusive of Mac and many mobile devices.


    There is a shift from folks who used a desktop/laptop to just using a tablet/smartphone as that serves the needs they have. Many new users of personal computing are coming online direct in the mobile versions (developing economies and G20 world).


    But in the PC world - the pie is growing.. its just the research uses an outdated definition of PC to mean a Microsoft operating system driven desktop or laptop computer.


    Add to that the fact that computer hardware has the CPU/Memory/Storage to be "good enough" for a much longer time, folks are not replacing systems - so new sales are down yes, and will continue to do so. If it works, I'm not replacing it just because its 5 or 10 years old.

  10. Avatar

    bbold

    HP is truly a great PC manufacturer today, and who would have though that was even possible? I remember one of my first HP laptops, it was essentially a five pound monstrosity (DX something or other, back in 97.) How times change!

  11. Avatar

    nbplopes

    I personally don't see this has much of a problem. Not even I see it has a failure of the PC standard aka Microsoft but the maturity of technology and the technological world at large.


    In the "beginning" the PC was the go to computing platform. It was actually the only platform that made possible productivity, entertainment, schooling and content consumption at large.


    Who ever thought that the PC would be the only computing platform highly used and needed was of course wrong and misguided. This is similar to IBM thinking that only Mainframes would ever be needed and most people would not use computers. If you look at what happened with technical advancements in any context and nature at large this was inevitable as it is non efficient way to approach all opportunities given by technical advancements at scale. Simply put this one ring to rule them all does not scale well from a technical perspective and ultimately from an experience perspective if not for the most "simple" challenges and opportunities we face today.


    The PC decline, is not a decline. Its a fine tune.


    PCs are being pushed to be used more in context and in particular what we call productivity tasks. But even there, they are being pushed to be used in specialized productivity contexts.


    As Intel and Microsoft are the beacon of the Personal Computing, Apple and ARM are today the beacon of Mobile Computing.


    More than these statistics its important to see what is going on in terms of technical advancements in mobile computing. Mobile computing took computing to places that PCs never did and were found hard to mold to go there. And is showing capabilities to take our more responsibilities of the PC that has taken until now.


    One particularly interesting, that Apple did not make much of a fuss with its custom ARM Architecture is performance. Performance that surpasses in no so few tasks attributed to the PC in the last decade. One of them ... multitasking. This realization is quite surprising to me.


    Starting applications on my iPad Pro 10.5" it just faster than on any PC or Mac I have. Moving between application is just as fast at least, side by side Windows work ok for the contrived 10.5" inch, and at 13" side by side work as well as on a 13" PC laptop. One might say ... well they are simpler applications. I personally don't know why, would you consider a Internet Browser a simple application? What a about a photo editing application that rivals light room? Is that a simpler application? I don't know.


    I'm not being scientific with this observation, but its nevertheless factual and easily demonstrated. Another non scientific test I did was with Excel mobile on the iPad Pro 10.5" and Excel PC on SP3 and on my Mac. A loaded this spreadsheet on both: https://github.com/sharadc2001/MsgHubDI/blob/master/CSVData/Sample-Spreadsheet-100000-rows.csv


    Well it is not 100000 rows but about 37000 rows. Anyway, I added a last line with an "Hello World" entry. Than I moved to the first cell on both systems. On the iPad Pro 10.5", searching took less than a second to locate the entry (looked almost immediate to me). On the PC took me 2 seconds.


    Again this is a non scientific test. But may be an indication that there little impediment from a performance perspective for not to have a more sophisticated Excel kind of apps supporting Pivot Tables, analytical graphs, so on and so forth. Or a more feature complete Microsoft Word on the iPad. Its a case of developing the application not of problem of the underlying architecture or OS.


    Has ARM based mobile computing alternatives to the PC mature towards enabling the keyboard and eventually the trackpad or mouse, such as the iPad, the PC will be pushed for specialized tasks. MS will fight back aggressively of course (s* loads of Marketing and vaporware) with their one ring to rule them all in the context of Windows, but the natural laws of things are not in their favor from technical perspective in the context of Windows. Neither have they proved that they can keep up with the advancements of alternatives architectures. Yes Windows will come to ARM, but thinking that this thing will be has optimized as iOS or Android has little evidence to back it up. On the other hand, MS needs to deal with of Microsoftians that demand they x32 apps run anywhere Windows goes. Meanwhile the alternatives are maturing and showing surprising things, even in the space where PC were considered untouchable. But for a long time MS is not just Windows, and with Nadella it moved to a more distributed approach to technology, with product like Office, Azure so on and so forth. In particular with the vision that Windows is NO LONGER THE PLATFORM. The Cloud is the Platform ... the Cloud is supra device. Still without good native device integration experience will always have its limitations. To overcome this, I think Thurrot is right. MS should launch a specialized version of Android as much as Samsung is doing, and leverage on Android ecosystem to revamp its mobile initiative and stop Pushing Windows Everywhere, but MS Cloud Everywhere.


    Cheers.


  12. Avatar

    LocalPCGuy

    From our shop's experience, people typically get on their computers less. Smartphone, and tablets, are sufficient to check email and web surf, especially useful when in a store to do price comparison. We have some customers that have more PC's than they use. When one goes down, they simply use another one. Much of our business now is replacing bad parts, such as a solid state drive in place of an older slow hard drive. This inexpensive repair breathes new life into the old machine and negates the need for a new PC.

  13. Avatar

    chrisrut

    "Does the PC market bottom out at some level, apparently still unknown? Or does it continue a long, steady decline?"

    The only way to understand and properly segment the long-term markets is by I/O requirements of user tasks - use-cases - within a population. If a user needs a particular I/O capability he or she will use whatever device can provide it. Generally, for any but simple, single-screen I/O, that still means a PC. Thus, as long as users need i/o versatility, the "PC" market will retain a non-zero portion of the computing market as a whole. That percentage will fluctuate as the size of the whole market changes, as use-cases evolve, and as technology alters use-cases.

    As long as the installed base can satisfy the use-cases, the market will grow or shrink at roughly the retirement/replacement rate. That's called market saturation.

    We all sit patiently waiting and fervently hoping for some disruptive technology to make it all interesting again...i.e. to open up new possibilities.

    OK, maybe not patiently.

  14. Avatar

    david.thunderbird

    Are you sure that image wasn't used last year?

  15. Avatar

    Bats

    LOL...that image is funny.

    I hate to say this, but here it goes: See I Told You So.

    I think it was about 5,6, or 7 years ago, when Paul was poo-pooing the Chromebook PC and voluntarily enlisted in Microsoft's Scroogle campaign against Google, I remember telling him how wrong he was. I remember commenting on the Supersite how the Chromebook and the phone will eventually pull Windows PC's down, because the features offered on a Windows PC is complicated and that software costs too much. In addition, I also saw the potential of web apps. Web Apps aren't just easier to use, in terms of usability and accessibility, and hardly requires any installation.

    I still feel now, as I felt then, the Windows PC will be reduced to 1 PC per (middle class) household. I think that when it comes to that point, the PC decline will may have bottomed out. 

    Again, it's all about the ecosystem and right now, and Microsoft has none. Without question, Google has the best. They are the standard. Not even Apple can touch them. Perhaps everyone has a different definition of ecosystem. To me, an ecosystem is like one's house. In one's house, you can eat, sleep, watch tv, play games, read and do whatever you like within the confines of your own space. With Google, you can work, play, be entertained all within one log in. I just keep hearing Paul (and Andew) keep talking about how weak the Microsoft App ecosystem is. I think it's much much more than that. 

    Don't get me wrong, this is not a total rejection of Microsoft. I bet people are not even thinking about it. It's just that offerings by Chromebooks, Android, and iPhones are just better. 

  16. Avatar

    dcdevito

    Can I use that image for a slide deck I'm presenting to my boss next week explaining why my project is going to need an extension? :)

  17. Avatar

    Angusmatheson

    1) another analysis for this would be go America. All 3 is the American computer companies - Dell, HP, and Apple - all grew. While Lenovo fell by a lot. That is not what I expected even a few years ago when it looked like Lenovo would eat everyone lunch (both computers and phones). 2) interesting how the fact that everything is now a computer from phones, to cars, to printers, to kids toys and so on - so need chips, ram, and drives - is pushing up the costs of components so traditional computers cost more and are sold less. This trend will accelerate.

  18. Avatar

    MikeGalos

    Of course, by that methodology, every person who replaces their conventional laptop with a Surface Pro or other tablet based full computer is a decrease since they don't differentiate between a full computer in a tablet form factor and a $70 Android throw away sold at the electronics aisle of the neighborhood pharmacy.

    • Avatar

      nbplopes

      In reply to MikeGalos:


      I think Gardener/IDDC considers that any computer running Windows 10 Pro, Windows 10 Home are PCs, hybrid or not. The looks or marketing presentation does not matter just in case you thought it was de determining factor to be in the set or not.


      Cheers.


  19. Avatar

    Narg

    As far as OEMs go, to me Lenovo is gaining because they are still making a rock solid/no extreme frills/get the job done computer. Dell is dying because they are getting weird and extremely non-standard again. Doesn't Dell go through cycles like this? Sad to hear ASUS having so many problems. They need to get a better foothold on what they do and how. Their basic desktop was a high recommendation last year, but those seem to have gone away. Gone away to what??? Desktops are not exciting, and should NOT be exciting. They just need to be plain and simple and WORK. Lenovo right now is the best choice for that.

    • Avatar

      hrlngrv

      In reply to Narg:

      Did you read either press release? Both Gartner and IDC show Lenovo declining year-on-year, -8.4% and -5.7%, respectively, while also showing Dell growing YoY, +1.4% and +3.7%, respectively. FWIW, Lenovo's % market share also declined. How do you interpret Lenovo gaining?

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