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EMEA PC market drops 4.3% in Q1 2016

EMEA PC market drops 4.3% in Q1 2016.

Worldwide PC shipments totalled 64.3 million units in the second quarter of 2016, a 5.2% decline from the second quarter of 2015, according to preliminary research results from Gartner.

This was the seventh consecutive quarter of PC shipment declines, but Gartner analysts say the market is showing some signs of improvement.

"One of the ongoing problems in the PC market has been the price hike in selected regions due to the weakening local currency against the US dollar," says Mikako Kitagawa, principal analyst at Gartner. "The price issue has impacted the EMEA and Latin America regions for the past year. However, PC shipment declines became rather modest in the second quarter compared with previous quarters, which suggests a fading currency impact."

Political instability

All regions except North America experienced a PC shipment decline, the market analyst firm says, adding the Latin America region was still weak largely because of political and economic instability.

PC shipments in Latin America are expected to fall below five million units for the second quarter of 2016, which is a decline of more than 20% from the second quarter of 2015. These shipment results would be some of the lowest in the history of the Latin America PC industry.

According to Gartner, Lenovo maintained the number one position in worldwide PC shipments in the second quarter of 2016, despite a 2.2% decline in units from the same period last year. This was the fifth consecutive quarter of global PC shipment declines for Lenovo. The company experienced double-digit growth in the US mobile PC market. In Asia/Pacific, Lenovo's shipments declined, but the decline was less than the overall average in the region.

The research firm points out HP returned to growth in the second quarter of 2016 after four consecutive quarters of shipment decline. HP resolved its inventory build-up, which had slowed its sell-in shipments, it explains. HP did well in EMEA to maintain the top position, but it was not able to surpass Dell in the US.

Dell grew faster than the industry average in all regions in the second quarter of 2016. It did especially well in the US, Latin America and Japan markets, Gartner notes. Mobile PC shipments grew across all regions except EMEA, while its desktop PC shipments declined in most regions, it adds.

Asus, Apple and Acer are battling it out for the fourth position in worldwide PC shipments for the second quarter of 2016, as Gartner's preliminary results get finalised.

In the US, PC shipments totalled 15.2 million units in the second quarter of 2016, a 1.4% increase from the second quarter of 2015. The US PC market had experienced five consecutive quarters of shipment declines. Analysts say there are still opportunities and challenges ahead for the US PC market.

"While vendors and channels generally have more optimistic expectations of PC sales compared with the past, there is still a chance to have a potential inventory built. This will depend on how PC market demand picks up in the second half of this year for both the business and consumer segments," says Kitagawa.

"The second and third quarter are typically PC buying season for the US public sectors. Positive second-quarter results could suggest healthy PC sales activities among the public sectors. There is an opportunity for a Windows 10 refresh among businesses, which we expect to see more towards the end of 2016 to the beginning of 2017."

Asia-Pacific PC shipments totalled 22.7 million units in the second quarter of 2016, a 6.3% decline from the second quarter of 2015, Gartner reveals. With a stagnant economy in the region, it put pressure on discretionary spending, and smartphones ranked as a higher priority to purchase than PCs, it notes.

Gartner adds there were election activities in Australia, the Philippines and South Korea, which created a lull in IT spending from the government sector. PC shipments in China declined 6.4% in the second quarter of 2016. Business confidence is weak in China, and this affects consumer buying patterns.

EMEA drop

PC shipments in EMEA totalled 17.8 million units in the second quarter of 2016, a decline of 4.3% from the same period in 2015.

"Declines in PC sales slowed to single digits in EMEA due to the end of the depreciation of the euro against the US dollar, and the related price increases in euros," says Isabelle Durand, principal research analyst at Gartner.

"Brexit has had no impact in the second quarter beyond the steadily weaker pound since the referendum was announced in 2015. However, post-Brexit sterling was sharply weaker against the dollar, and this will trigger price increases that will likely cause downward pressure on fourth-quarter sales in the UK."

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