PC shipments suffer drop in Q2

The personal computer market dropped globally as shipments decreased for fifth quarter in a row. This is a new record low for the whole history of the PC industry.

Shipments of devices slided to 76 million units, a nearly 11% decline for the second quarter compared to last year, as consumers turned to budget tablets over desktop or laptop computers, especially in emerging markets, according to a report released on Wednesday by Gartner, a research company.

“In emerging markets, inexpensive tablets have become the first computing device for many people, who at best are deferring the purchase of a PC,” said Mikako Kitagawa, principal analyst at Gartner. “This is also accounting for the collapse of the mini notebook market.” he added for Financial Times.

The losses were the worst in Europe, the Middle East and Africa, which showed around 17% decline because of poor economic conditions that offset consumer spending. Asia was also weak at an 11.5% decline, driven by China. The outlook for both regions remains low as sellers are stuck with leftover inventory.

However, the US market showed signs of stability although shipments sank by 1.4% this is much lower percentage than previous quarterly decline. Both IDC and Gartner attributed the US improvement to commercial sales, suggesting a push from companies upgrading to Windows 7 in anticipation of Microsoft ending technical support for the previous version, Windows XP, next April. This suggests real numbers could be worse than expected.

The negative shipments data supports the argument of proposed Dell buyout, which shareholders are set to vote on next week. Institutional Shareholder Services, an investor advisory group, noted this week that shareholders were being offered a good price in the buyout considering the crumbling PC market.

If approved, they would shift most of the risk to Michael Dell, Dell’s founder and chief executive, whose move to buy back his company was described by analysts as “trying to catch a falling knife”.

Dell performed better than the overall market in the third quarter, with shipments falling only 4%. It stayed at third position behind Lenovo and Hewlett-Packard.

Shares of Dell are up more than 31% year to date. Company lost 0.22% in yesterdays trading.