PC shipments grew in Q2, fueled by tariff concerns and Windows 7 migrations

End of extended support for Windows 7 is just six months away, giving a modest boost to the PC market, though concern over potential tariffs sent shipments higher.

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Reports about the state of the PC market have, for the last decade, followed a pattern of doom-and-gloom, as depressed sales over poor reception of Windows, and worries stemming from the state of general state of the economy, as well as (to date, overblown) forecasts of tablets upending the PC market are infrequently punctuated by brief moments of joy over PC shipments increasing.

Shipments of PCs grew by 4.7% year-over-year in Q2 2019, according to IDC, with estimates from Gartner indicating a more modest 1.5% growth. This negativity persists about the forecasts despite shipments increasing, as uncertainty in the market is growing as a result of a potential trade war between the US and China.

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"While the U.S.-China trade war did not impact the PC market in the second quarter of 2019, the next phase of tariffs could have significant impact," Mikako Kitagawa, senior principal analyst at Gartner, said in a press release. "Most laptops and tablets are currently manufactured in China and sales of these devices in the U.S. could face significant price increases if the punitive tariffs are imposed and vendors do not take quick action to respond."

Lenovo topped the market, shipping 15.8 million units in Q2 2019—representing a quarter of the market, overall. Lenovo also showed the largest growth year-over-year, at 15.9%. As a Chinese multinational, it is possible the company could face additional scrutiny, though as Gartner's Kitagawa noted, the reliance on Chinese manufacturing poses potential problems for the industry at large, including HP and Dell, the second- and third-largest vendors. Together, the top three comprised 64.1% of global PC shipments last quarter, compared to 60.7% in 2018.

Apple was fourth by Gartner's estimate, with 3.7 million units (5.9%), while Acer was fifth at 3.4 million units (5.4%). IDC's estimates swap the two, with Acer at 4.3 million units and Apple at 4.1 million—while methodologies vary between market analysis firms, it is noteworthy that IDC indicates that Acer's shipments slipped 1.7% year-over-year, while Gartner pins Acer's decline at a significantly higher 14.4% year-over-year.

Increased availability of Intel CPUs following protracted shortages also served to increase shipments in Q2 2019. Intel's troubled transition to a 10nm manufacturing process, combined with its prioritizing production capacity for server CPUs over lower-power parts used in desktops and laptops, resulted in supply constraints that resulted in a significant oversupply of DRAM in March.

Likewise, the impending end of extended support for Windows 7 is leaving enterprises facing a decision to register for (paid) security updates, which will extend out to 2023, or replacing systems with new hardware running Windows 10. (Notably, the South Korean government is evaluating adopting Linux on existing hardware that runs Windows 7.) In April, Gartner predicted that only 75% of professional PCs will be running Windows 10 by 2021.

For more, check out "Epson just announced the perfect business notebook, but good luck trying to buy one" and "Increasing storage densities require aggressive software management to maintain performance" on TechRepublic.

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