The personal computer (PC) business globally is in trouble, and the hardest hit large manufacturer is Apple Inc. (NASDAQ: AAPL), maker of the decades old Mac. Fortunately, the Mac is not Apple’s flagship anymore.
PC sales may never recover, but the rate at which the industry has imploded slowed recently. Research firm IDC points out:
Worldwide PC shipments totaled nearly 68 million units in the third quarter of 2016 (3Q16), a year-on-year decline of 3.9%, according to the International Data Corporation Worldwide Quarterly PC Tracker. Shipment volume continued to decline, but the results were about 3.2% ahead of projections.
The better than expected results reflect competition among the market leaders and an effort to capitalize on market consolidation and future stabilization. After struggling to reduce inventory over the past year or more, PC vendors are now rebuilding inventory for the second half of the year. Combine this with an improving outlook, a race for market leadership between Lenovo and HP, and efforts to guarantee component supplies, and market drivers are taking shape. The seasonal increase in volume during the second half of the year and projected stronger demand going forward provide some justification for more aggressive positioning.
Results varied substantially by region:
Mature regions continued to perform best, with the United States taking the lead with a second consecutive quarter of positive growth. In other developed markets growth was stable or improved slightly with near flat growth in Japan and Canada, followed by a small decline in Europe, the Middle East and Africa (EMEA). Shipments in Asia/Pacific (excluding Japan) continued to decline in mid-single digits while Latin America struggled with double-digit declines.
Lenovo, the top manufacturer, suffered a 3.2% decline in shipments during the third quarter to 14,511,000. HP Inc. (NYSE: HPQ) had shipments of 14,392,000, up 3.3%. Dell’s shipments were 10,751,000, up 6.2%. Apple shipments dropped 13% to 5,014,000. Asus sales rose 5.2% to 4,693,000.
Fortunately, Mac sales are little more than a rounding error for Apple’s results. Mac revenue in Apple’s most recently reported quarter was $5.2 billion out of Apple’s total of $42.4 billion.
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