PC Sales Slide as Chip Costs Drive Prices Up

PC Sales Slide as Chip Costs Drive Prices Up

SAN FRANCISCO—Shipments of traditional PCs slide by 3.3 percent in the second quarter as increased costs for components such as DRAM and flash memory began driving the price of systems higher, according to market research firm International Data Corp. (IDC).

PC shipments have been declining regularly for the past five years. The year-over-year decrease of 3.3 percent was actually slightly better than the 3.9 percent decline that IDC had previously forecast. Sequentially, shipment volume increased only slightly compared to the first quarter, breaking the typical norm of significant sequential growth from the first quarter to the second.

Jay Chou, a research manager with IDC’s worldwide PC device tracker, said in a press statement that the PC market continues a trend toward stabilization.

"Despite recent issues wrought by component shortages and its effect on system prices, we expect the momentum of commercial market replacements will contribute to eventual market growth,” Chou said.  “Consumer demand will remain under pressure, although growth in areas like PC gaming and the increasingly attractive portfolio of sleek Windows-based systems will help push the consumer market to stabilize as well."

Estimated second quarter PC shipments by vendor in thousands of units. Click here for larger image Estimated second quarter PC shipments by vendor in thousands of units.
Click here for larger image

IDC said an inventory buildup caused by shortages of key components such as solid state drives eased in the second quarter. But the market research firm said shortages of components such as memory chips—both DRAM and flash memory prices are increasing under capacity constraints—drove increases in the typical PC bill of materials (BOM), adding to the headwinds causing repeated PC shipment declines.

From a regional perspective, mature markets generally outperformed emerging markets, with the Asia/Pacific region and Latin America showing weakness, IDC said. Shipments in the U.S. declined only slightly but otherwise did better than expected due largely to sales of Chromebooks, IDC said.

Among global PC vendors, Hewlett-Packard Co. led in shipments for a second straight quarter, hitting a new market share high of 23 percent after achieving aggressive growth in virtually all regions, IDC said. China’s Lenovo was again No. 2 in PC shipment in the second quarter despite a 5.7 percent year-over-year decline in shipments, the market research firm said. 

--Dylan McGrath is editor-in-chief of EE Times. 

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