Hewlett-Packard CEO Dion Weisler and the PC industry had something to smile about on Thursday as PC shipments rose for the first time in six years.
- Worldwide PC shipments grew in the second quarter for the first time in six years, Gartner reported Thursday.
- But that rebound isn't likely to last, Gartner warned.
- Consumers continue to abandon PCs for smartphones, schools are turning to Chromebooks, and business demand was boosted by an upgrade cycle that will likely taper off within two years.
The PC business isn't dead yet.
But it sure doesn't look very good, and its prospects continue to look bleak.
Those seem to be the takeaways from Gartner's latest report on PC shipments, which it issued on Thursday. The report showed that for the first quarter in more than six years, the number of PCs shipped worldwide actually grew on annual basis.
It's certainly good news for the industry that shipments grew, but the results weren't exactly impressive. Overall shipments were 62.1 million, up just 1.4% from the same period last year. And while the top five PC makers all grew in the quarter, shipments from the rest of the market plunged 13% in the period.
Even with the growth, shipments in the quarter were still down by nearly a third from the third quarter of 2011, when PC shipments hit their peak at 91.8 million.
Consumers are trading PCs for smartphones
What's worse, the rebound - such as it was - is likely to be short-lived. Consumers continue to abandon PCs, choosing instead to use their smartphones for more and more tasks, Mikako Kitagawa, an analyst at the research firm, noted in the report.
"In the consumer space, the fundamental market structure, due to changes on PC user behavior, still remains, and continues to impact market growth," Kitagawa said.
Businesses are still buying PCs, and their purchases boosted overall sales in the quarter. But those purchases are being driven by companies belatedly upgrading to Windows 10, the latest version of Microsoft's PC operating system - and that's a temporary phenomenon, Kitagawa said.
"PC momentum will weaken in two years when the replacement peak for Windows 10 passes," she said.
As might be expected in a maturing, declining industry, the quarterly results demonstrated how the PC business continues to consolidate around a handful of players. Lonovo and Hewlett-Packard alone accounted for nearly 44% of all shipments in the second quarter, up from about 41% a year ago. Together, shipments from the top five PC makers comprised 74% of the total, up from 69% in the same period last year.
The same story is playing out in the US as it is globally
The story was much the same in the United States as it was for the world as a whole. US PC shipments grew in the second quarter to 14.5 million, but were up by only 1.7%. The result marked the first positive quarter for the industry in the US in nearly two years - but it was still millions of units below the market's peak.
Meanwhile, in the US, traditional PC shipments are facing another challenge - Chromebooks, which Gartner doesn't include in its shipment numbers. Shipments of computers based on Google's Chrome OS software grew 8% in the quarter.
"Strong Chromebook demand in the education market adversely affected PC growth," Kitagawa said.
So, while the PC industry proved it still has some life left in it, there are plenty of reason to think this is just a pause in its long-term decline.