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PC Market Q4 2011: Shipments Sag Amid Lackluster Conditions

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SAN FRANCISCO (AP) — Personal computer shipments dipped during the final three months of last year amid a shortage of key parts or compelling innovations.

A portrait of a lackluster PC market emerged in separate reports Wednesday from Gartner Inc. and IDC.

Worldwide PC shipments ranged somewhere between 92 million and 93 million during the fourth quarter, based on preliminary figures compiled by the research firms. The numbers could be adjusted after PC makers release their own data as part of quarterly earnings reports due out in the next week.

For now, Gartner is pegging the worldwide shipment decline at 1.4 percent from the same period in 2010. IDC calculated the decrease at just 0.2 percent.

The slight downturn had been expected for several reasons, chiefly the growing popularity of mobile devices that are more convenient, less expensive and almost as powerful PCs.

Smartphone sales have been booming since Apple Inc. introduced the iPhone in 2007 and Google followed with a free Android operating system now used in more than 200 million handsets world. In the past two years, computer tablets such as Apple Inc.'s iPad have been undercutting PC sales.

The global pecking order among PC makers remained the same in the fourth quarter. Hewlett-Packard Co. led with roughly 16 percent of the market, followed by Lenovo Group with 14 percent and Dell Inc. with roughly 13 percent.

The challenge of competition was compounded in the fourth quarter by hard-disk drive shortages and the fact that many products were either uninspiring or overpriced, according to analysts at Gartner and IDC.

The disk-drive shortages arose after massive floods in October in Thailand, which accounts for about one-fourth of the world's production of that vital PC part.

And the machines that made it to the market didn't help.

"There didn't seem to be enough innovation to give people a reason to go out and buy a computer," said IDC analyst Jay Chou.

The shortages are expected to get worse during the current quarter, raising the specter of even larger PC shipment declines.

At this point, many consumers may hold off on buying a computer until the second half of this year when machines running on a dramatic makeover of Microsoft's Windows operating system are likely go on sale. Microsoft hasn't set a target date for the release of Windows 8, but most analysts expect it will occur in the late summer or early autumn. Windows 8 will overhaul the operating system so it can run on PCs or computer tablets and be controlled by touch, computer mouse or keyboard.

Windows 8 is expected to steer many so-called "ultrabook" PCs — the term being widely used to describe more nimble versions of laptop computers.

A few ultrabooks went on sale on the fourth quarter, but they weren't revolutionary enough to lure consumers into paying the higher prices that PC makers were demanding, said Gartner analyst Mikako Kitagawa.

The PC market was especially feeble in the U.S., where Gartner and IDC estimated fourth-quarter shipments fell 5 percent to 6 percent from the same period in 2010. That represented the biggest year-over-year quarterly drop in the U.S. in a decade, according to IDC.

HP remained the top seller of PCs, despite a 16 percent drop in its fourth-quarter shipments. Gartner blamed the steep slide on confusion triggered by HP's announcement last August that it might sell its PC business. That plan was scrapped after HP hired Meg Whitman as CEO in September.

In the U.S. the top three PC makers were HP, Dell and Apple.

For the full year, worldwide PC shipments ranged from 352 million to 353 million, based on the preliminary numbers from Gartner and IDC. By Gartner's math, the full-year shipments edged up 0.5 percent from 2010; in IDC's book, the full-year shipments increased 1.6 percent.

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