Leadership

Global PC sales plummeted in Q1, dragged down by corporate desktop drop

The global PC market took one of its largest sales plunges ever in Q1 2009, according to iSuppli. Total units shipped fell 8.1% year-over-over and were down 14.1% from Q4 2008, the largest dips in the seven years that iSuppli has been tracking unit sales.

The global PC market took one of its largest sales plunges ever in Q1 2009, according to iSuppli. Total units shipped fell 8.1% year-over-over and were down 14.1% from Q4 2008, the largest dips in the seven years that iSuppli has been tracking PC shipments.

The heaviest anchor in the market was desktop sales, down 23% year-over-over, and that is most likely tied to corporate buyers. Businesses and IT departments are simply not buying many new computers for their workers. They are stretching out the life of existing machines, and some are likely using extra machines from laid off workers to replace any malfunctioning PCs rather buying new systems.

Matthew Wilkins, iSuppli analyst, said "The worldwide recession sparked by the credit crisis slammed PC shipments for the second quarter in succession during the first three months of 2009. The first-quarter performance of the worldwide PC market was worse than iSuppli had expected in its prior forecast, which called for a 4 percent decline in shipments compared to the same period in 2008. After a long period of immunity to the global downturn, the economic crisis finally has begun to impact the PC market."

Here are some notable quotes from the iSuppli report:

  • PC shipments in the first quarter of 2009 amounted to 66.5 million units, an 8.1 percent decline from 72.3 million during the same period in 2008, and a 14.4 percent drop from 77.6 million in the fourth quarter of 2008.
  • The desktop segment was the major culprit for the PC decline, with first-quarter unit shipments dropping by 23 percent compared to the same period in 2008. In contrast, notebook shipments grew 10 percent compared to the first quarter of 2008.
  • iSuppli in the first quarter continued to observe strong netbook sales through network operator retail stores. The Top-5 PC OEMs cited sales through such outlets as driving demand for their netbook products.
  • There were no changes in the rankings of the world's Top-5 PC OEMs in the first quarter compared to the same period a year earlier.
  • Toshiba posted the strongest growth among the Top-5 on a percentage basis, with its shipments rising by 13.5 percent from a year earlier.
  • Dell experienced an 18.7 percent drop in PC unit shipments, declining to 8.8 million in the first quarter, compared to 10.8 million during the same period in the 2008. The company's market share declined to 13.2 percent, down from 14.9 percent in the first quarter of 2008. ("Dell's performance in the first quarter was heavily influenced by its weak desktop shipments, which dragged down its overall market share," said Wilkins.)
  • Hewlett-Packard remained the No.-1 PC OEM for the 11th successive quarter, with its shipments remaining flat from a year earlier at 13 million units. The company held a market share of 19.7 percent.

Here is iSuppli's chart with the breakdown of market share by vendor in Q1:

About

Jason Hiner is the Global Editor in Chief of TechRepublic and Global Long Form Editor of ZDNet. He is an award-winning journalist who writes about the people, products, and ideas that are revolutionizing the ways we live and work in the 21st century.

10 comments
paul.arrowood
paul.arrowood

How much of this decline do you attribute to the increasing adoption of "thin client" or virtual desktop solutions?

jasonhiner
jasonhiner

I do know A LOT of IT leaders who are either evaluating or testing thin clients (especially VDI). It could be that many of them are holding off buying new desktops until they figure out their thin client strategy.

JamesRL
JamesRL

I've been hearing about the rise of the thin client since my days acting as a planner and listening to the gang at Gartner. My company sells both PCs and thin clients, and given the price gap has significantly narrowed, no one seems to want to buy a thin on price. Where they do want them is where users have had issues with viruses, or HW issues, and they want to use terminal services. Another group use old PCs running W2K and using RDP into a Terminal server with XP sessions, avoiding the hasseles of replacing PCs. Despite having an application and a networking environment that lends itself, few clients want to dive into thin clients. The ones that do seem happy with their choice. James

Bebedo
Bebedo

Perhaps the most interesting portion of the article is the graphic showing a dramatic plunge in sales specific to Dell. HP held their own, but Dell looked crushed. I wonder on what dimension Dells are losing -- price, functionality, design, quality, customer support? I'd be interested in something more in-depth on that.

RealGem
RealGem

Dell is big into the corporate environment, while HP (with the Compaq brands) is heavy into the consumer retail channels. If you go to Walmart, Future Shop, etc. you see a lot of HP. The point of the article is that corporate buying is down, so this would hurt Dell (and Lenovo) far more than HP. Acer is doing ok because they are into the netbooks, which are hot right now. That end of the market isn't damaged by recession as much. IMHO, if the recession takes longer to recover, you will see a decline in the HP stuff as more and more of the population is impacted. Corporations feel the pinch first, then lay off their staff, who feel the pinch later.

Bebedo
Bebedo

It really should be no surprise that desktop sales are declining. Laptop computers offer most of the functionality plus mobility that users desire -- and the increase in laptop sales mentioned here show that demographic. Also, game systems are replacing the home buyers' desktop system. When you can go online and play on the X-box, Nintendo, or PS#, once again, you need a compelling reason to shell out thousands of dollars for a desktop gaming system. Finally, businesses will not upgrade to Vista with Windows 7 on the horizon and Vista widely panned as a dog -- no matter what the marketers say, the failure of Vista in enterprise systems is a fact. Why train twice, why go through the administrative headaches (if not nightmare) of implementing a Vista system when W7 promises to be more efficient, stable, and dynamic (if the beta testers are to be believed, and there's no reason not to). So if you are a personal user, you are using alternatives; if you are a business user, you are waiting. Makes perfect sense (cents)!

SilverBullet
SilverBullet

I agree with your analysis in terms of the MS Windows. Vista did not pass the smell test with enterprise systems and IT Directors. Many are sitting on the sidelines with respect to new units. Windows7's future will reflect in any success the PC makers may have.

RealGem
RealGem

I don't buy the Microsoft-bashing part. Not that I'm a huge fan of them, but even though Vista has been out for a long time, we continue to buy desktop units and laptops with XP. Vista has not influenced our decision on how many units to buy. In fact, neither with Windows 7. As long as we have a supported OS...

SilverBullet
SilverBullet

seek the XP. My company just purchased me a new laptop with the Vista branded on the cover, however the company gave me the unit with XP. Thank God. Windows 7 is a remake of Vista, is it not still version 6?

Turin73
Turin73

While MS wanted Vista adopted I don?t think they were that concerned with it being a bit of a flop. It was a substantial from XP which many business saw as a good OS. I consider Vista as more of a stepping stone to get wide spread adoption of Windows 7. This means that people that have looked at Vista have either increased their hardware specs or plan to meet Vista. There has been much publicity about Windows 7 compared to Vista. The real issue is a lot of companies do not have the money to upgrade or replace workers. Also the drive towards mobile computing is affecting things. The idea of cloud computing with technology such as Citrix, VDI (or whatever it is called this week) have also impacted things. Why buy a new PC when it is only hosting remote apps? So I don?t agree with blame at Microsoft?s door, but I agree with you on Windows 7 will reflect in success.