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Personal Computer Market Continues Downward Trend

Personal computer (PC) manufacturers will find no relief from the latest overall industry assessment. Worldwide PC shipments totaled 67 million units in the third quarter of 2017 -- that's a 3.6 percent decline from the third quarter of 2016, according to the latest global market study by Gartner.

Note, this is the twelfth consecutive quarter of declining PC shipments. Optimistic industry analysts continue to seek an upside for this historically weak technology market, but some of the largest regions still show no sign of a meaningful recovery.

Personal Computer Market Development

"While there were signs of stabilization in the PC industry in key regions, including EMEA, Japan and Latin America, the relatively stable results were offset by the U.S. market, which saw a 10 percent year-over-year decline in part because of a very weak back-to-school sales season," said Mika Kitagawa, principal analyst at Gartner.

Business PC demand, led by Windows 10 upgrades, continued to drive PC shipments across all regions of the globe, but its refresh schedule varies by region. Those with stable economies, such as the U.S. market, have created a positive sentiment among businesses, especially for small and mid-sized businesses (SMBs), which are more vulnerable to external events, such as economic or political.

Moreover, there are ongoing component shortages, with DRAM shortages getting particularly worse during the third quarter of the year compared with the first half of 2017. The component price hike impacted the consumer PC market as most vendors generally pass the price hike on to consumers, rather than absorbing the cost themselves. Gartner expects the DRAM shortage to continue to the end of 2018, but it will not be reflected in the final PC prices immediately.

In the U.S. market, PC shipments totaled 14.7 million units in the third quarter of 2017 -- that's a 10.3 percent decline from the third quarter of 2016. It was the fourth consecutive quarter of declining PC shipments.

"Weak back-to-school sales were further evidence that traditional consumer PC demand drivers for PCs are no longer effective," Ms. Kitagawa said. "Business PC demand is stable in the U.S., but demand could slow down among SMBs due to PC price increases due to component shortages."

Global Outlook for PC Growth Potential

PC shipments in EMEA totaled 19 million units in the third quarter of 2017 -- that's a 1.1 percent decline year over year. The contraction in the Western European PC market appears to have slowed down, with the potential for stability in the fourth quarter of 2017.

Eastern Europe is experiencing flat to small unit declines as demand is not improving, and there is no obvious impact yet from the Windows 10 migration in the business segment.

In the Asia-Pacific region, PC shipments reached 24 million units in the third quarter of 2017 -- that's down 2.1 percent from the same period last year. While consumer demand remained lackluster, PC demand in the business segment remained steady, especially for notebooks.

In China, the PC market is estimated to have declined by 5 percent in the third quarter of 2017, with more stability in the business market, particularly in large enterprises, than in the consumer space.

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