(PC) Decline in PC Shipments Continues

Personal Computer (PC) shipments continue to struggle as research firms Gartner and IDC reported a decline in PC shipments for the fourth quarter of 2011. Gartner and IDC estimate 1.4% and 0.2% declines in worldwide PC shipments, respectively in the fourth quarter.

Worldwide PC shipments for the fourth quarter were in the range of 92 million and 93 million, as per Gartner and IDC. The adjusted figures could be gathered from the PC makers, as the companies release their quarterly reports in the coming weeks.

This decline in PC shipments is attributable to various factors, the most important of them being the growing popularity of the mobile devices that are more convenient, less expensive and almost as powerful as PCs. The massive popularity of smartphones was primarily responsible for the decline in PC sales.

In this regard, the iPhone needs a special mention as Apple Inc’s . (AAPL) iconic device has garnered a massive fan following since its launch in 2007. Google Inc.’s  (GOOG) Android operating system (used in more than 200 million smartphones across the world) has also contributed to the popularity of smartphones, which in turn has affected PC sales. This apart, with the advent of tablets, which are becoming increasingly popular, PC sales have further deteriorated.

Global PC major Hewlett-Packard Company (HPQ) leads the pack with 16.0% of the total market share. The second and third positions are held by Lenovo and Dell Inc. (DELL), respectively, with 14.0% and 13.0% market share.

The problems for the PC manufacturers were aggravated by the recent flood in Thailand, which disrupted the hard disk manufacturing process for some time, leading to hard-disk drive shortages, and thereby leading to a price increase, with a corresponding pressure on margins. The increase in costs is somewhat absorbed by the PC manufacturers, while the other part is passed on to the consumers through price increases.

The greatest decline in PC shipments was reported in the US. Both Gartner and IDC calculated a fourth-quarter PC shipment decline of 5.0% to 6.0% in the US, which is the biggest fall in PC shipments in the last decade.

HP grabbed the top position in terms of PC sales in the U.S., despite a 16.0% decline in its fourth-quarter shipments. This massive drop in PC sales was attributable to HP’s decision of selling its PC division, which did not materialize.

Moreover, worldwide PC shipments for the full year ranged from $352.0 to $353.0 million, based on the preliminary numbers from Gartner and IDC. As per Gartner, the full-year shipments edged up 50 basis points from 2010; while full-year shipments improved by 160 basis points.

We believe that lower tech spending, the growing popularity of tablets and increased smartphone usage will have a considerable effect on PC sales going forward.

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