PC Sales Are Dropping, but Not Every Vendor Feels the Same Pinch

The PC industry has continued to be stuck in the doldrums throughout 2018, but the pain of the industry’s contraction over the past six years hasn’t been felt equally by all vendors. For those following along at home, the PC industry has been shrinking since tablets became popular in 2011. That year, a total of 365.36 million PCs were shipped. In 2017, just 262.54 million units were shipped. The nearly 30 percent decline hit hardest in the early years — sales figures in 2017 only declined slightly from 2016, and 2018 is only slightly lower than 2017 thus far — but it had profound impacts on the market. One of those impacts has been the decline of a number of smaller system vendors.

Gartner reports that sales fell 1.4 percent in Q1 2018 (Q2 figures aren’t available yet), but those declines have been split differently between vendors. Dell, HP, and Lenovo have all done reasonably well, with both Dell and Lenovo gaining market share (Dell sales are up 6.5 percent compared with 2017). But the “Others” category? That’s where the screws have turned. From a high of 40.68 million units shipped in Q3 2011, the “Others” category has shrunk to 14.61 million shipments in 2018.

And it seems likely that much of that decline has come from the lower-end and midrange whitebox OEM systems, rather than high-end gaming boutiques that would otherwise be classified as part of “Other.” While this is speculation on our part, to be clear, we’ve heard from Intel, AMD, Nvidia, and other companies more generally that gaming hardware sales continue to increase, and that the PC gaming market, while obviously a niche space, has been growing overall. The cryptocurrency boom of the past year also made boutique systems more attractive during the several months when it literally wasn’t possible to buy a consumer retail GPU at a sane price point. Companies like Acer weren’t protected from the downturn by any kind of presence in the boutique gaming space, and the company’s PC sales have fallen by more than 50 percent since the downturn began.

That kind of shift could have significant impacts on how PC hardware evolves in the future. In fact, one could argue it’s already played a part in the market’s history to the present day. Back in the 1980s, the widespread availability of IBM clones made it possible for upstart companies like Compaq to launch and compete with Big Blue for the lucrative PC market. Acer was once known for its willingness to shake up the traditional beige PC by offering new colors (seriously, in the mid-1990s, “any color but beige” was a top-drawer feature). Competition between the OEMs helped keep prices lower for customers, and ultimately was responsible for companies like Dell starting to carry AMD hardware back in the mid-2000s.

The collapse of the PC space outside the largest vendors isn’t terribly surprising given the size of the drop, the internet’s general tendency to drive consolidation, and the fact that smaller vendors couldn’t hold on in the face of year after year of significant declines. But that same collapse also makes it harder for new or existing hardware companies to win shelf space or break into the market. If you can’t promise enough business to win the attention of the handful of major OEMs left standing, your chances of winning shelf space at all are even lower than they used to be.

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