Conflicts, disasters could hurt PC shipments in Q2

13.04.2011
The natural disasters in Japan and political tension in the Middle East could hurt PC shipments during the second quarter this year, an IDC analyst said on Wednesday.

Japan is a major manufacturer of components like batteries, and any disruption in the supply chain could impact the price of and demand for PCs, said David Daoud, research director at IDC. The 9.0-magnitude earthquake on March 11 and the ensuing tsunami in Japan have killed more than 13,000 people and caused extensive damage to buildings and factories along Japan's eastern coast. Blackouts and closure of transportation links hurt Japan's supply chain. However, factories are slowly resuming operations after inspection and repairs.

Rising oil prices, driven by the recent conflicts in the Middle East and Libya, could increase the cost of making and supplying computers and components, Daoud said. That could trigger a rise in PC prices.

PC shipments worldwide are already on shaky ground. PC shipments totaled 80.56 million during the first quarter of 2011, declining by 3.2 percent compared to the first quarter of 2010, IDC said in a report released on Wednesday. However, there is not much data to suggest that shipments during the quarter were hurt by events in Japan, Daoud said.

The decline follows a record 26 percent growth during last year's first quarter, which was driven by people upgrading PCs and buying new computers with Microsoft's new Windows 7 OS, which was released to the general public in October 2009.

The earthquake happened toward the end of the first quarter, and PC makers likely had components stashed away to build and supply computers for a couple of weeks, Daoud said. The real impact of Japan's natural disasters will be felt in the second quarter when components start running short, Daoud said.

A lack of economic confidence in Europe could also contribute to the slowdown in PC shipments, Daoud said. That is a big change from the same quarter a year ago, when record PC shipment growth came as economies were exiting the recession.

There was a lot of interest in PCs when Windows 7 came out, but the excitement has dried up, so consumers are trying to extend the life of their PCs, Daoud said.

"What we are seeing now may be part of a correction ... plus a very difficult [economic] environment out there," Daoud said.

While Daoud said a straw poll would suggest a lot of interest in tablets, there is not empirical evidence yet to suggest that tablets are directly hurting PC shipments, which are much larger in volume. Tablets are used as secondary computing devices to PCs, but as new usage models emerge, tablets could "cannibalize" PC shipments over time, Daoud said.

The top three PC vendors -- Hewlett-Packard, Dell and Acer -- saw PC shipments fall year over year due to lackluster demand for products. However, fourth-placed Lenovo saw shipments grow by 16.3 percent due to strong demand for its products in China and a disciplined channel expansion worldwide.

HP shipped 15.2 million PCs, down by 2.8 percent year over year, but grew its market share to 18.9 percent. Dell's shipments totaled 10.3 million units, falling by 1.8 percent, with its market share growing to 12.8 percent. Acer's shipments dropped by 15.8 percent to 9.04 million due to slow demand in Europe, the Middle East and Africa, the company's largest market, and reliance on the slumping netbook market. Lenovo's shipments totaled 8.17 million units.