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CPU shortages and political issues hit PC market

Things had been going well in the first half of 2018 but then a couple of negative factors undid a lot of that good work in the last months of the years

 The PC market has had a tough time in recent years trying to shake off the idea that it is on its last legs and shortages and political and economic issues have not helped.

The story of last year was very much one of two halves according to Gartner. Things started well with a fairly decent H1, but then a CPU shortage and growing political uncertainty and issues like a US v China trade war started to make life difficult in Q3 and 4.

Gartner has shared its analysis of what happened in Q4 and the year with the last three months of 2018 suffering a 4.3% drop compared to the previous period a year before.

For the year as a whole there was a 1.3% decline but Gartner kept an upbeat tone on the prospects for the hardware segment pointing out that the blame was largely down to external factors.

The analyst house noted that although this marked the seventh consecutive year of PC shipment decline the drop was less steep than in the previous three years.

“Just when demand in the PC market started seeing positive results, a shortage of CPUs (central processing units) created supply chain issues. After two quarters of growth in 2Q18 and 3Q18, PC shipments declined in the fourth quarter,” said Mikako Kitagawa, senior principal analyst at Gartner.

“The impact from the CPU shortage affected vendors’ ability to fulfill demand created by business PC upgrades. We expect this demand will be pushed forward into 2019 if CPU availability improves," she added.

The other factor was political and economic uncertianty. Although that phrase is usually another way of saying Brexit the problems were not confined to a single country and were more widespread.

“Political and economic uncertainties in some countries dampened PC demand,” Kitagawa said. “There was even uncertainty in the U.S. — where the overall economy has been strong — among vulnerable buyer groups, such as small and midsize businesses. Consumer demand remained weak in the holiday season. Holiday sales are no longer a major factor driving consumer demand for PCs.”

In terms of the vendor positions the top three - Lenovo, HP and Dell - increased their dominance of the global market, enjoying a 63% share of the market in Q4, up from 59% a year before.

Lenovo overtook HP to become the number one global player in the PC market in Q4 with Gartner noting that the joint venture it formed with Fujitsu in May had a positive factor. The firm produced three quarters of double-digit shipment growth.

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