PC shipments have posted the steepest decline on record during a single quarter, as buyers seemingly move away from Microsoft's Windows 8 PC software.
With worldwide PC shipments falling 14% in the first three months of this year, research firm IDC says the drop is the fastest it has seen - signaling worrying times for the industry.
Capping off over twelve months of bad news for the PC market, as consumers shift towards tablets and smartphones, the results also marked the fourth consecutive quarter of year-on-year shipment declines.
Despite some mild improvement in the economic environment, IDC says PC sales have been hampered by traditional barriers of price and component supply, as well as a weak reception for Windows 8.
"At this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market," says Bob O'Donnell, vice president, Clients and Displays, IDC.
"While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the UI, removal of the familiar Start button, and the costs associated with touch have made PCs a less attractive alternative to dedicated tablets and other competitive devices.
"Microsoft will have to make some very tough decisions moving forward if it wants to help reinvigorate the PC market."
The impact of slow demand has also been magnified by the restructuring and reorganising efforts impacting HP and Dell.
Yet Lenovo continues to remain a notable exception as it continues to execute on a solid "attack" strategy.
"Although the reduction in shipments was not a surprise, the magnitude of the contraction is both surprising and worrisome," says David Daoud, research director, Personal Computing, IDC.
"The industry is going through a critical crossroads, and strategic choices will have to be made as to how to compete with the proliferation of alternative devices and remain relevant to the consumer.
"Vendors will have to revisit their organisational structures and go to market strategies, as well as their supply chain, distribution, and product portfolios in the face of shrinking demand and looming consolidation."
HP remained the top vendor, but posted a substantial double-digit decline in shipments after an aggressive fourth quarter kept growth flat during the holidays.
IDC says the company's worldwide shipments fell more than -23% year on year during the quarter, with significant declines across all regions, as internal restructuring continued to affect commercial sales.
And although HP maintained its leadership position in the United States, the company saw U.S. shipments fall -22.9% from a year ago.
Lenovo remained second in global shipments and nearly closed the gap with HP as it continues to outpace the market, notably expanding shipments with its attack strategy.
Dell, in the midst of a private takeover bid, saw shipments decline by more than -10% globally and -14% in the United States.
The vendor continued to face tough competition and struggled with customer uncertainty about the direction of its restructuring.
Nevertheless, the decline in shipments was smaller than the past few quarters, and its sales to Asia/Pacific returned to positive growth.
Acer Group continued to see substantial declines in shipments across regions. As the leader in Mini Notebook shipments, the vendor has been particularly exposed to the decline in these systems with slow consumer and SMB growth also taking a toll.
ASUS managed some growth in the United States, but saw a substantial decline in EMEA and Asia/Pacific.
The company's substantial surge in Americas shipments in the second half of 2012 gave way to limited growth as demand weakened.
Apple fared better than the overall U.S. market, but still saw shipments decline as its own PCs also face competition from iPads.
Toshiba also saw shipments decline in the United States, but fared better than the overall market, benefitting somewhat from the restructuring of market leaders HP and Dell.
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