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Going down: NZ PC shipments slump in Q1

13 Apr 2015

PC shipments in New Zealand slumped in Q1, with exchange rates one of the key factors – and the months ahead aren’t looking much better.

While IDC hasn’t released its New Zealand figures, the analyst firm’s Worldwide Quarterly PC Tracker shows a decline in global PC sales of 6.7%.

Arunachalam Muthiah, IDC New Zealand market analyst, says he expects the New Zealand figures to be ‘more or less aligned with the global results’.

“There has been a slowdown compared with Q4,” he says.

Muthiah says the reasons for the Kiwi slowdown include an inventory excess left over from Q4 and the end of the XP migration refreshes last year.

But the exchange rate is the main kicker impacting the New Zealand market.

“The New Zealand dollar weakened against the US, and almost everyone is planning to raise their prices,” Muthiah says.

“On the commercial side it has already happened with prices up around 10%,” he says.

As companies have begun renegotiating prices the sales cycle has been dragged our longer, and sales that were expected in Q1 haven’t been finalised.

Muthiah says on the consumer side, price increases of between 10%-15% are expected across the board.

“At the end of the day, it’s about margins, and in order to make money, prices have to rise,” he adds.

The exchange impact is ‘quite significant’, Muthiah says.

“Hopefully the dollar stays stronger but if not we can expect more delays in refreshes.”

Muthiah says the only exception for the New Zealand PC market has been with Chromebooks, which he expects have done well in Q1 – a traditionally strong time for education sales.

He says Windows 10 is not expected to bring any major relief for the market.

“I don’t think anything significant will happen there. On the consumer side it’s a free upgrade so it won’t drive shipments. And on the commercial side there’s not likely to be impact because with last year’s XP upgrades companies are not likely to go out and upgrade to Windows 10 now.”

Q1’s slowdown comes after a bumper year for the New Zealand PC market last year. The market saw year on year growth of 15.9% to record the strongest year the New Zealand market has ever seen, according to IDC, which dubbed the results ‘astonishing’.

Adds Muthiah: “The market is going to slow down in 2014 because of those price increases, plus having no more XP refresh and the excess inventory.”

On the global side

Globally, PC shipments totalled 68.5 million units for Q1, slightly ahead of previous projections, IDC says.

The figure is the lowest recorded volume since Q1 2009.

IDC says PC shipments in the United States, were down 1%, a slower decline than all other regions, outperforming worldwide trends for the eleventh consecutive quarter.

“The strength from key vendors, adoption of emerging products, improvements in the consumer market and in the broader economy are all positive signals,” Rajani Singh, IDC senior research analyst for personal computing, says.

Growth was centred in portables, particularly around emerging product categories such as Chromebooks, Bing, ultraslims and convertables. Desktop shipments were ‘relatively sluggish’, IDC says.

Volume in Asia/Pacific, excluding Japan, was close to expectations as scaled-back IT spending due to the ongoing currency fluctuation hit many countries in the region.

One the vendor side, Lenovo held onto top position, with 13.4 million units shipped, growing 3.4%. IDC says the vendor continued to aggressively court expansion outside of Asia, especially closing the gap on competitors in EMEA.

Lenovo also moved ahead of Apple to capture third position in the US.

HP remained number two, with nearly 13 million PCs shipped and growth surpassing 3%, driven primarily by growth in the US and EMEA.

Both HP and Lenovo continued to outpace the market and their nearest competitors, IDC says.

Dell took number three slot globally with 9.2 million shipments, but saw a year on year decline of 6.3%.

Acer and Asus rounded out the top five, with Acer recording a 7% drop in shipments to 4.8 million, while Asus grew 4.4% to 4.8 million shipments.

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