The U.S. personal-computer market declined for the first time in a decade last year, hurt by sluggish consumer spending, supply shortages, and the popularity of smartphones and tablets.
Shipments slipped 4.9 percent to 71.3 million in 2011, the worst performance since 2001, research firm IDC said today. The U.S. market fell 6.7 percent in the fourth quarter, compared with a 0.2 percent drop for worldwide shipments.
A separate report from Gartner Inc. pegged the fourth-quarter U.S. decline at 5.9 percent, with global shipments decreasing 1.4 percent.
Worldwide shipments also fell, the firms reported.
However, Lenovo, which maintains its executive headquarters in Morrisville, bucked the trend with 37 percent growth from a year ago, according to IDC. Gartner said Lenovo, which tightened its grip on second place in global sales behind HP, increased sales 23 percent. Lenovo moved past Acer (fourth) and Dell (third) over the past year and has set its sights on catching HP.
Consumers and small businesses are holding off on orders while they ride out the sluggish economy, even as many corporate buyers stock up on PCs. Flood-ravaged disk-drive factories in Thailand also took a toll on the market, though component shortages resulting from the disaster will have a bigger impact in 2012, Gartner found.
“The culprit is the consumer,” David Daoud, an analyst at IDC, said in an interview. “Consumers and small businesses are the ones that are struggling the most.”
Worldwide shipments declined to 92.7 million in the fourth quarter, from 92.9 million a year earlier, IDC said. Gartner put the number at 92.2 million, down from 93.5 million. In 2001, when the industry was suffering from a recession and the dot-com bust, U.S. PC shipments tumbled about 12 percent.
Hewlett-Packard Co. (NYSE: HPQ), which decided in October to keep its PC business in house after exploring a potential spinoff, remained the industry’s top seller in the fourth quarter. Still, its global market share slipped to 16 percent from 18.8 percent, according to Gartner. Lenovo ranked second with 14 percent, up from 11.3 percent. Dell Inc. (Nasdaq: DELL) was third with 12.6 percent, compared with 11.6 percent a year earlier.
In the U.S., HP also ranked first, with 23.1 percent of the market, with Dell in second place at 22.4 percent, Gartner said. Apple Inc., which wasn’t even in the top five a year ago, saw shipments jump 20.7 percent. That put it in third place, Gartner found.
Lenovo did not crack the top five.
The first quarter isn’t likely to bring relief to the PC industry. Shipments in the period may decline by 5.1 percent, said IDC’s Daoud.
The slight downturn in the fourth quarter had been expected for several reasons, chiefly the growing popularity of mobile devices that are more convenient, less expensive and almost as powerful PCs.
Smartphone sales have been booming since Apple Inc. introduced the iPhone in 2007 and Google followed with a free Android operating system now used in more than 200 million handsets world. In the past two years, computer tablets such as Apple Inc.’s iPad have been undercutting PC sales.
The challenge of competition was compounded in the fourth quarter by hard-disk drive shortages and the fact that many products were either uninspiring or overpriced, according to analysts at Gartner and IDC.
The disk-drive shortages arose after massive floods in October in Thailand, which accounts for about one-fourth of the world’s production of that vital PC part.
And the machines that made it to the market didn’t help.
“There didn’t seem to be enough innovation to give people a reason to go out and buy a computer,” said IDC analyst Jay Chou.
The shortages are expected to get worse during the current quarter, raising the specter of even larger PC shipment declines.
At this point, many consumers may hold off on buying a computer until the second half of this year when machines running on a dramatic makeover of Microsoft’s Windows operating system are likely go on sale. Microsoft hasn’t set a target date for the release of Windows 8, but most analysts expect it will occur in the late summer or early autumn. Windows 8 will overhaul the operating system so it can run on PCs or computer tablets and be controlled by touch, computer mouse or keyboard.
Windows 8 is expected to steer many so-called “ultrabook” PCs — the term being widely used to describe more nimble versions of laptop computers.
A few ultrabooks went on sale on the fourth quarter, but they weren’t revolutionary enough to lure consumers into paying the higher prices that PC makers were demanding, said Gartner analyst Mikako Kitagawa.
For the full year, worldwide PC shipments ranged from 352 million to 353 million, based on the preliminary numbers from Gartner and IDC. By Gartner’s math, the full-year shipments edged up 0.5 percent from 2010; in IDC’s book, the full-year shipments increased 1.6 percent.
Read the Gartner report here.
Read the IDC report here.
(The AP and Bloomberg contributed to this report.)
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