UPDATED 02:47 EDT / APRIL 10 2015

PC market nosedives as Windows XP replacement cycle ends

5969635620_e452b7e00c(1)Despite showing signs of life earlier this year, the PC market has once again hit a downward trend, according to analysts from Gartner Inc. and International Data Corp. Both industry watchers released their quarterly PC market trackers yesterday, with Gartner showing shipments fell by 5.2 percent to 71.7 million units in Q1, while IDC said shipments slumped by 6.7 percent to 68.5 million units for the quarter.

In its assessment, Gartner had Lenovo Group, Hewlett-Packard Co., Dell Inc., Asus and Acer down as its top five vendors, with only the first two showing any signs of growth. Dell showed a slight decline in its PC shipments for the first time in six quarters.

As for IDC, it listed the top five vendors as Lenovo, HP, Dell, Acer and Asus, agreeing with Gartner that both Lenovo and HP were showing signs of life, while Dell and Acer both saw sales slump. But in contrast to Gartner it estimates that Asus actually grew in the last quarter, effectively putting it neck-and-neck with Acer in fourth place.

So was last year’s slight recovery just a blip? That’s what the analysts seem to think, saying that the small gains made in 2014 were largely due to Microsoft ending support for Windows XP in April last year. That led to many concerned businesses and consumers scrambling to update, which often meant buying brand new PCs running Windows 7 or 8, rather than just installing a new operating system.

But while there are still millions of PCs running Windows XP, the replacement cycle is fast fading – those who haven’t upgraded already simply don’t give a hoot about the security risks of running outdated software, it would seem.

Going forward, the analysts differ in their outlook, with Gartner being the more optimistic of the two. Mikako Kitagawa, principal analyst at Gartner, said the decline doesn’t necessarily indicate sluggish sales in the long term.

“Mobile PCs, including notebooks, hybrid and Windows tablets, grew compared with a year ago,” Kitagawa said. “The first quarter results support our projection of a moderate decline of PC shipments in 2015, which will lead to a slow, consistent growth stage for the next five years.”

IDC was far more cautious in its outlook, however.

“Although shipments did exceed an already cautious forecast, the market unfortunately remains heavily dependent on pricing being a major driver, with entry SKU volume masking a still tenuous demand for higher priced systems that is needed to sustain a more diverse PC ecosystem,” said Jay Chou, senior research analyst at IDC. “Pricing pressure is bringing many premium SKUs into formerly mid-level pricing tiers. As more vendors find it increasingly difficult to compete, we can expect additional consolidation in the PC market.”

Photo Credit: Paolo Camera via Compfight cc

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