PC sales see worst drop ever in Q1

Worldwide sales of personal computers slid 13.9 percent in the first quarter of 2013, research firm IDC said Wednesday, the worst contraction since it began tracking the market in 1994. IDC said global PC shipments totaled 76.3 million units in the first quarter, the fourth consecutive quarter of year-on-year declines. The group said sales were down "significantly across all regions" of the world. The research firm said tablets and smartphones "continue to divert consumer spending" and efforts by PC makers to come up with touchscreens and capabilities and ultra-slim systems have fallen flat. While surveys have shown consumers shifting away from traditional PCs to tablets and other devices, the survey highlighted a grimmer-than-expected market. The survey found a result far worse than IDC's projected 7.7 percent year-on-year drop despite what the firm called "some mild improvement in the economic environment and some new PC models" with the Windows 8 operating system. "At this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market," said IDC analyst Bob O'Donnell. "While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the UI (user interface), removal of the familiar 'Start' button, and the costs associated with touch have made PCs a less attractive alternative to dedicated tablets and other competitive devices. "Microsoft will have to make some very tough decisions moving forward if it wants to help reinvigorate the PC market." IDC said Hewlett-Packard remained the top vendor despite a 23 percent year on year drop in first-quarter shipments. China's Lenovo remained second in global shipments and nearly closed the gap with HP, based on IDC estimates. According to IDC, HP sold 11.997 million PCs for a 15.7 percent market share to 11.7 million for Lenovo, for a 15.3 percent share. Dell was third at 11.8 percent followed by Taiwan firms Acer (8.1 percent) and Asus (5.7 percent). A separate report by Gartner painted an equally bleak picture. Gartner said global shipments fell 11.2 percent from a year earlier to 79.2 million, dropping below 80 million units for the first time since the second quarter of 2009. Mikako Kitagawa, analyst at Gartner, said: "Consumers are migrating content consumption from PCs to other connected devices, such as tablets and smartphones. Even emerging markets, where PC penetration is low, are not expected to be a strong growth area for PC vendors. Gartner data showed HP and Lenovo "in a virtual tie" for the top vendor spot, with HP barely ahead at 14.8 percent to 14.7 percent for Lenovo. In the US, HP is in the middle of a wrenching restructuring to cope with the market shift, while Dell is mulling a private buyout led by founder Michael Dell in an effort to revive growth. The US market for PCs slumped 12.7 percent in the first quarter, according to IDC. Gartner data showed a 9.6 percent drop. Apple outperformed most of its peers by grabbing more market share in the US, but faced pressure "as its own PCs also face competition from iPads," according to IDC.