Western Europe’s PC Market Declines 11 Percent in Q32011 – Gartner

PC shipments in Western Europe totalled 14.8 million units in the third quarter of 2011, a 11.4 percent decline from the same period last year, according to a new Gartner, Inc. report.

“The inventory build-up that slowed growth in the last four quarters was mostly cleared during the third quarter of 2011; however, the PC industry continued to perform below normal seasonality,” says Meike Escherich, principal analyst at Gartner. “The results in the third quarter of 2011 make unpleasant reading for the PC industry, as the third quarter is traditionally a strong consumer quarter, driven by back-to-school sales.”

The report notes that Europe’s mobile PC market was particularly hard hit with a 12.6 percent decline, driven by more than a 40 percent decrease in mini notebook (or netbook) shipments in the third quarter of 2011, while desktops declined by 8.7 percent.

The market category showing the greatest decline was in the consumer segment, which decreased 18.8 percent year-on-year. A much hoped-for uptake of professional PCs in the wake of the migration to Windows7 remained subdued by a generally pessimistic economic outlook in the region,
with PC shipments in the professional segment declining 2.1 percent year-on-year.

HP held on to its No. 1 position, managing uncertainties created by a possible spinoff of its PC division (now not to happen) better than had been expected. Asus bucked the general downturn trend with shipments increasing sharply, with growth in the company’s notebook sales across the consumer and small or midsize business (SMB) markets. As a result, ASUS displaced Dell in the No. 3 position, with Dell slipping to No. 4. The report notes that Acer’s continuing inventory problems opened up the channel for ASUS and other vendors to push their own shipments. Apple meanwhile acheived fifth place with a contra-trend 28 percent growth in mobile PCs experiencing double-digit growth in both consumer and professional market space.

Market share for mini-notebooks continues to decline, contributing to the weak year-on-year comparison. Moreover, the consumer PC markets in Western Europe remained essentially weak, with consumer confidence permanently shaken by the economic issues spreading across most of the region, says Ms. Escherich.

UK: Market Moved at Three Speeds

PC shipments in the UK totalled 2.9 million units in the third quarter of 2011, an 11 percent decline compared with the same period in 2010 (see Table 2).

“The market seems to be moving at three speeds,” says Ranjit Atwal, research director at Gartner. “The top two vendors, HP and Dell, continued to struggle to find new opportunities and experienced single-digit declines; Acer, in the process of inventory re-adjustment, declined more than 50 percent; Apple and Samsung gained strength in the market. More importantly, quarter-on-quarter, all vendors saw growth apart from Acer, suggesting the fluctuations in the market may be bottoming out.”

The consumer market had the biggest impact as PC shipments in this segment, declining 18 percent year-over-year. Over the last year as HP’s, and particularly Acer’s, dominance began to shrink, the next tier of vendors, headed by Samsung and Apple, have been making the consumer market much more competitive with increased choices on retailers shelves. The professional PC market remains muted but the need of organizations to move to Windows 7 provides some underlying momentum, the report observes.

In the third quarter of 2011, HP retained its No. 1 position acquired last quarter in the U.K., with Dell also holding on to second place. Samsung chased Apple for the fourth position and collectively had a higher market share than Acer. With brand becoming more important as buying criterion in the PC market both of these vendors have a strong PC and cross device proposition. This will enable them to tackle the top three even more in 2012.

France: PC market better than the Western European average

The PC market in France showed a slight decline and exhibited results better than the Western European average in the third quarter of 2011. PC shipments in France totaled 2.6 million units in the third quarter of 2011, a decline of 2.1 percent compared with the same period in 2010 (see Table 3).

“The PC market in France performed slightly above expectations due to better results in the professional segment,” says Isabelle Durand, principal analyst at Gartner.

France’s consumer PC market declined 9.2 percent mainly because the demand for mini notebooks was lower compared with a year ago. Retailers also shifted their focus to other devices such as media tablets and once more this quarter they have been cautious in placing orders. The consumer market was also affected by the continuing decline in the desktop segment.

The professional market saw more demand for mobile PC replacements with Windows 7 migration, and the segment increased by 10 percent in the third quarter of 2011.

“In the third quarter of 2011, the mobile PC market accounted for 69 percent of total PC shipments in France, with volumes growing by 3 percent. Deskbased PCs declined by 11 percent year-on-year,” says Ms. Durand. “Of the total mobile segment, mini notebooks declined by 21 percent year-on-year.”

In Q3 2011, of the top five vendors, only ASUS and Toshiba showed growth. HP regained the No. 1 spot, despite a slight decline mainly due to low results in the consumer segment as it benefited from the uptake in the professional market. ASUS achieved good results and replaced Dell in the No. 3 position. Acer’s channel inventory levels were reduced, but the channel has been conservative in placing orders following the inventory issues.

The French PC market is expected to show some positive trends in the fourth quarter of 2011. Growth should improve towards the end of the year with product refreshes and promotions.

Germany: PC Market Saw Fifth Consecutive Quarter of Shipment Declines

PC shipments in Germany totalled 3 million units in the third quarter of 2011, a decrease of 7.9 percent compared with the same period in 2010 (see Table 4). This is the fifth consecutive quarter of declines for the German PC market.

“As expected, back-to-school PC sales were disappointing as the popularity of non-PC devices, such as media tablets and smartphones, diverted consumer spending from PCs. Exceptionally low consumer demand resulted in a 17 percent decline in the home segment,” says Gartner’s Ms. Escherich.

The PC market continued to be hit by poor mobile PC sales that decreased 8.8 percent in the third quarter of 2011. The decrease was once again steeper than for the desktop PC market which declined 5.9 percent in the third quarter quarter.

HP continued its lead in the PC market in Germany as it accounted for 15.8 percent of PC shipments in the third quarter of 2011. Demand in the professional PC market has improved as organisations released budgets to migrate aging PCs to Windows 7. HP in particular seemed to benefit from this upturn in the professional market, and it showed above-average growth. During the third quarter nearly every one in four professional PCs was shipped by HP.

In the third quarter of 2011, Acer’s German market share declined further, a whopping 42 percent, as a large number of mobile PCs were cleared out of distribution. ASUS’s continued investment in sales and marketing beyond the consumer segment seemed to work well. ASUS secured third place in the market by widening the gap with Dell, now in fifth place. Balancing profit and volume gain was a challenge for Dell in a tough competitive environment. Fujitsu achieved double-digit growth in the third quarter of 2011 after struggling to grow for several quarters. The growth was due in part to a comparison with a weak quarter last year. However, Fujitsus re-organisation and more-aggressive approach on pricing in the professional market has helped.

“Quarter-on-quarter growth of 23.5 percent could be seen as an indicator that the PC market in Germany is at least stabilising, and maybe has bottomed out, as shipments finally settle on new lower growth levels,” says Ms. Escherich.

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Apple CEO Tim Cook Hopes This Species Of Cannibalization Continues

Forbes’ Brian Caulfield notes that European PC sales continue to erode, and the iPad’as fingerprints are all over the numbers, citing a new report from Gartner analyst Meike Escherich (see below item). Gartner excludes media tablets from its PC sales metrics, but as Euro PC shipments slumped 11.4% to 14.8 million units in the third quarter from 16.7 million units during the year ago period the official culprits are fingered as weak consumer confidence (understandable given the general economic malaise Europe is gripped by these days) and a declining consumer appetite for the cheap mini-notebooks that have been padding PC shipment figures for years.

Meanwhile media tablets, dominated by the iPad, are still selling briskly and highlighting Apples strength a the high-end of the notebook market where Apple, along with Asus remain ascendent despite the market downturn, at the expense of traditional PC heavyweights, with Western European Mac sales growing 19.6% to 1.3 million units, up from 947,000 year-over-year and taking 7.6% of the Western European PC market.

“With cannibalization like this, I hope it continues,” Caulfield quots Apple Chief Tim Cook remarking during Apple’s latest earnings call.

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