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Windows XP EOS offers flagging PC market timely boost

11 Apr 2014

Worldwide PC shipments totalled 76.6 million units in the first quarter of 2014, a 1.7 percent decline from the first quarter of 2013 with the severity of the decline easing compared with the past seven quarters.

That’s according to global analyst firm Gartner, which claims the ends of Windows XP support has provided a boost in PC replacements.

“The end of XP support by Microsoft on April 8 has played a role in the easing decline of PC shipments,” says Mikako Kitagawa, principal analyst, Gartner.

“All regions indicated a positive effect since the end of XP support stimulated the PC refresh of XP systems.”

Professional desktops, in particular, showed strength in the quarter - among key countries, Japan was greatly affected by the end of XP support, registering a 35 percent year-over-year increase in PC shipments.

The growth was also boosted by sales tax change with Gartner expecting the impact of XP migration worldwide to continue throughout 2014.

“While the PC market remains weak, it is showing signs of improvement compared to last year,” Kitagawa adds.

“The PC professional market generally improved in regions such as EMEA. The U.S. saw the gradual recovery of PC spending as the impact of tablets faded.”

The PC market continued to be tough for many vendors. Economies of scale matter tremendously in this high-volume, low-profit market, which is forcing some vendors, such as Sony, out of the market.

In contrast, all of the top five vendors, except Acer, registered year-over-year shipment growth. The top thee vendors — Lenovo, HP and Dell — have all confirmed the importance of the PC business as part of their overall business strategies.

Lenovo experienced the strongest growth among the top five vendors with company shipments growing 10.9 percent (see Table 1), extending its position as the worldwide leader.

The company’s shipments grew in all regions except Asia/Pacific, where growth in China has been problematic. Overall, the China market again slowed, in part due to the long holiday in the middle of the quarter.


In Asia Pacific, PC shipments reached 24.9 million units in the first quarter of 2014, a 10.8 percent decline from the first quarter of 2013.

Pressure on traditional notebooks continued as the installed base transitioned to alternative devices and replaced only on an as-needed basis.

New hybrid ultramobiles with lower price points were available, but demand remained slow as buyers evaluated usage scenarios and application availability in a market with many other options.

“There were some pockets of opportunity that helped branded vendors leverage the PC replacement needs for Windows XP migration, cushioning further declines especially in the deskbased PC segment," adds Lillian Tay, Principal Analyst, Gartner.

“Other challenges in the quarter came from the election activities in Thailand, Indonesia and India putting cautious outlook for PC purchases, preferring to wait for policy changes and hoping they would be more business-friendly, while spending in the government sector was also put on hold.”

The top four vendors are managing the structural weakness of the PC market with growth rate declines below the market average and even growing their market shares from a year ago, according to Gartner.

Acer however continues to struggle as it adjusts its strategy of over reliance of the consumer market with entry level notebook price points.

“We will continue to see further acceleration of vendor consolidation forcing vendors to drastically change their strategies such as Sony's exit from the PC business and Samsung's withdrawal from entry-level notebooks,” Tay adds.

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