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U.S. PC shipments fell 6 percent last quarter

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Jan. 12, 2012

Market research firm Gartner said that PC shipments in the U.S. actually fell 6 percent last quarter from a year earlier.

The main cause is that tablets and smartphones continued to capture more of consumers' interest.

One device category that many predict will save the PC --the super-thin ultrabook laptops-- were quietly introduced into the market during the holiday season and barely made an impact on sales as well, something that surprised analysts at Gartner.

Instead, the personal computers that saw the most sales growth were ones the most unlike mobile devices-- all-in-one PCs with large, high-definition screens, Gartner said.

"Ultrabooks didn't seem to draw consumers' attention," said Mikako Kitagawa, principal analyst at Gartner. "Consumers had very little understanding and awareness of ultrabooks, and only a small group of consumers was willing to pay the price premium for such models."

But ultrabooks had a strong introduction this week at the Consumer Electronics Show in Vegas. Kitagawa said that as awareness rises and prices fall below the $1,000 level most are offered at now, the super-thin devices could ultimately boost PC sales this year.

Sales of ultrabooks are forecast to boom over the next few years in the same way that netbooks took off in 2007 before the iPad debuted in 2009. Fewer than 1 million ultrabooks were sold last year, making up just 2 percent of all notebook sales, according to estimates by IHS iSuppli, a tech analysis firm.

But for 2013, the ultra-thin notebooks could rise to 13 percent of all laptop sales, iSuppli forecasts.

Meanwhile, the PC is struggling to gain consumers' interest in a world where smartphones and tablets can do many of the day-to-day computing tasks that once required a personal computer. Apple was the only major PC vendor to sell more computers in the United States during the fourth quarter of 2011 than a year earlier.

Shipments of Macs rose by nearly 21 percent last quarter. Meanwhile, shipments of computers made by No. 1 PC-maker Hewlett-Packard dropped 26 percent. Shipments fell 4.5 percent at No. 2 Dell, about 2 percent at No. 4 Toshiba and more than 11 percent at Acer. Apple is the third-largest PC maker in the United States.

PC shipments measure sales to vendors like Best Buy and Staples, but not to end users. However, shipments and end-user sales are expected to be similar, since vendors order PCs based on buyers' demand for them, not in advance.

Overall, U.S. shipments totaled 68.7 million last year, down 4.2 percent from 71.7 million in 2010. The situation is only slightly better globally, where PC sales fell 1.4 percent during the quarter. For the year, global PC shipments were flat with 2010 levels-- well below the 4 percent increase that Gartner had predicted in a revised forecast issued in September.

Gartner had initially forecast a 10.5 percent increase for 2011 and continually revised that lower during the year, as consumer sales sank sharply in the United States and Western Europe. Businesses and consumers in regions with emerging economies like Latin America and Asia bought enough PCs to close the worldwide gap, however.

For this year, Gartner currently predicts global PC shipments will rise about 10.5 percent, but a revised forecast is due out in coming months.

Making matters worse, the impact of floods in Thailand hasn't yet been fully felt. The floods have sharply reduced the world's hard drive supply, but stockpiles were large enough for the shortage to have a limited impact on fourth-quarter PC shipments and prices, Gartner said.

But Gartner analysts still believe that a major impact will still be felt, materializing in the first half of the year and potentially throughout 2012. A resulting laptop shortage and potential price increases will weigh in on PC shipments in 2012.

All of this serves as an ominous sign for PC-reliant companies like Microsoft and Intel, which are scheduled to report their financial results in a week. Apple will announce its numbers on January 24.

So far, the companies have both been able to weather the storm, but both are making large pushes into the mobile arena to capitalize on consumers' trend away from PCs and toward smaller, mobile devices.

Source: Gartner Market Research.

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