End of Windows XP upgrade boom prompts Q1 PC shipments slump

Gartner's quarterly PC market tracker suggests the Windows XP upgrade effect has worn off

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Global PC shipments were down 5.2% year-on-year for the first three months of 2015, as the effects of the post-Windows XP upgrade boom wore off.

According to Gartner’s latest quarterly PC market tracker data, worldwide PC shipments topped 71.7 million units in Q1, with Lenovo and HP – the world’s first and second biggest PC suppliers, respectively – emerging as the only two of the top five to report signs of growth.

Dell, which came third in Gartner’s rankings, had a difficult quarter, recording its first year-on-year fall in shipments for six quarters.

The market watcher has attributed this downturn in Dell’s fortunes to the fact that fewer end-users were looking to replace PCs this year, having done so in 2014 after extended support for Windows XP ended.

“Dell was one of the suppliers that benefited from replacement purchases due to the end of Windows XP support in 2014, but sales slowed as the replacement cycle ended,” said Gartner.

This had a knock-on effect for the rest of the PC market in Q1, said Mikako Kitagawa, principal analyst at Gartner, with shipments down on last year's totals.

But this should not be interpreted as the start of a terminal decline for the PC market, said Kitagawa, as there are signs of better times on the horizon.

“This decline is not necessarily a sign of sluggish overall PC sales long-term,” she said. “Mobile PCs, including notebooks, hybrid and Windows tablets, grew compared with a year ago.

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“The first-quarter results support our projection of a moderate decline of PC shipments in 2015, which will lead to a slow, consistent growth stage for the next five years.”

Shipments of desktop PCs in particular fell sharply in Q1, said Kitagawa, as IT buyers shied away from replacing these devices with like-for-like machines.

“Desk-based PC shipments declined rapidly, with business desk-based PCs being affected the most,” she said.

“Mobile PCs are being driven by a separate underlying replacement cycle, which led mobile growth in the first quarter. PC replacements will be driven by thin and light notebooks with tablet functionality.

“Our early study suggests strong growth of hybrid notebooks, especially in mature markets, in Q1 2015.”

The figures for Europe, the Middle East and Africa (EMEA) were largely in keeping with the rest of the global market, with shipments down 4.4% on Q1 2014 to 21.7 million units.

It was a similar story in Asia Pacific during Q1, with 24.3 million units shipped – a year-on-year decline of 1.2%. China's lacklustre appetite for new PCs was flagged by Gartner as dampening market performance in the region overall.

The US, meanwhile, experienced its first PC shipment decline in four quarters, with 13.9 million units shipped, down 1.3% on last year’s total.

As in other markets, the downturn in demand for desktop PCs and the end of the Windows XP replacement cycle were both cited as causal factors in the US.

“The biggest reason for the decline of PC shipments in the US was attributed to the desktop market, which experienced a double-digit decline,” said Kitagawa.

“This was primarily due to the end of the Windows XP replacement cycle. By contrast, mobile PC shipments in the US continued to show year-on-year growth, and early results show this segment could have grown by about 10% in the first quarter of 2015.”

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