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The PC fights back: U.S. sales decline is slowing

Brad Chacos | July 16, 2013
Last week, the headlines screamed that computer shipments had plunged roughly 11 percent in the second quarter, after dropping a disastrous 14 percent the quarter before that. While it's hardly good news, we've known for a while that the rise of tablets, "good-enough computing," and (maybe, just maybe) a lackluster response to Windows 8's new-look interface have been bad for PC sales.

Last week, the headlines screamed that computer shipments had plunged roughly 11 percent in the second quarter, after dropping a disastrous 14 percent the quarter before that. While it's hardly good news, we've known for a while that the rise of tablets, "good-enough computing," and (maybe, just maybe) a lackluster response to Windows 8's new-look interface have been bad for PC sales.

But wait! A closer look at the numbers shows an interesting trend--if not exactly upward, then less steeply downward. Some signs indicate that we may be past the worst of the bleeding--though you shouldn't expect to see actual growth out of the PC industry any time soon.

Making scary numbers slightly less scary
Enduring a 14 percent drop in one quarter and then an 11 percent drop in the next one definitely isn't good, but it's important to note that those drops don't mean PC sales are down a total of 25 percent for the year. The data is year-over-year, comparing each 2013 quarter to its corresponding quarter in 2012. So computer shipments in the second quarter of 2013 dropped by 11 percent compared to the second quarter of 2012,notcompared to the first quarter of 2013.

Got it? Knowing that, the latest numbers are less devastating.

Yes, the first quarter's year-on-year decline was the sharpest ever, dropping from 88.6 million PCs shipped in Q1 2012 to about 76.2 million PCs in Q1 2013, according to IDC. (Data from Gartner, another research group, yields roughly the same numbers.) Fourteen percent! Geez.

But when you compare the Q2 2013 shipment number to the Q1 2013 shipment number, you realize that the drop hasn't been excruciating over the past seven months alone. According to IDC, 75.6 million PCs shipped in Q2 2013--a drop of just 600,000 units from the first quarter of the year.

Also, the top five PC vendors all moved more computers in the second quarter of 2013 than they did in the first quarter. The quarter-to-quarter unit loss came solely from "Others." (Sorry.)

Remember: Shipments are down a lot compared to last year. But comparing one quarter to the next, the PC shipment decline may be slowing down.

Even more heartening, the drop in shipments was considerably smaller in the United States than in the rest of the world: Gartner says second-quarter U.S. shipments declined by just 1.4 percent year over year, while IDC says U.S. shipments dropped by 1.9 percent year over year in Q2.

Why such relatively smooth sailing? Simple: In the United States, we may--may--already be over the worst of the tablet hump.

Much ado about tablets
"We know that a lot of tablet buyers feel that a lot of what they needed to do with a computer has been taken care of by a tablet," says Jay Chou, a senior research analyst at IDC. "That said, no one in our research feels that a tablet can 100 percent replace a PC. It's not a perfect substitute."

 

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