Surface Boosts Microsoft Into Top 5 PC OEM Status
Microsoft has broken into the top five PC OEMs in the US thanks to the overarching success of the Surface family and the collapse of Acer’s business over the same time period. While Acer remains a major worldwide vendor, with some 6.1 percent of the worldwide market and over 4 million PCs shipped worldwide in Q3 2018, Microsoft’s US performance was enough to knock it out of the local rankings.
Overall market performance remains poor by historical terms and relatively good compared with the bloodbath of the past seven years. After falling roughly 30 percent since 2011, PC sales have been more stable the last few quarters. Unfortunately, weakness in some markets is depressing what little growth exists. The US market shrank by 0.5 percent in Q3 2018 while Latin American sales fell 8.5 percent, offsetting almost all of the growth in EMEA, Asia/Pacific, and Japan.
“The PC market continued to be driven by steady corporate PC demand, which was driven by Windows 10 PC hardware upgrades. We expect the Windows 10 upgrade cycle to continue through 2020 at which point the upgrade demand will diminish,” said Mikako Kitagawa, principal analyst at Gartner. “Despite the third quarter typically showing strong consumer PC sales due to the back-to-school season, weakness in consumer PC demand continued, offsetting the strong sales in the business market.”
Our theory that AMD could pick up some market share as the result of Intel’s weakness got a nod from Gartner as well, with the firm reporting that this is an expected outcome.
“Although the third-quarter results did not show any material impact, the Intel CPU shortage could influence the PC market moving forward with price increases and changes to the vendor landscape,” Kitagawa continued. “While this shortage will have some short-term impacts, Gartner does not see any lasting impact on overall PC demand. Current expectation is that the shortage will continue into 2019, but Intel will prioritize the high-end CPU as well as the CPUs for business PCs. In the meantime, AMD will pick up the part of the market where Intel cannot supply CPUs.”
These figures, it should be noted, don’t include Chromebooks. That seems an odd choice, given that Chromebooks basically are PCs and Apple devices are clearly included. Chromebooks may not always use x86 processors, but then future Windows PCs don’t use always use x86 processors, either. It makes sense to leave iPads out of the PC market, but Chromebooks have also made a major push into education markets where Microsoft and other vendors compete. Hopefully, in the future, we can see figures with Chromebooks added to the mix or at least covered in the same press release. Gartner’s comments actually imply that so much demand for PCs has been shifted to Chromebooks, the back-to-school cycle isn’t operating the way it used to.
“The third-quarter results confirmed the continuous shift to Chromebooks among U.S. K-12 educational institutions. While PCs are still the main device for higher education students, most students already have PCs before they head off to college, so there is limited demand for new PCs from back-to-school sales. Overall, Chromebooks experienced double-digit growth in the U.S., but Chromebooks are not included in the PC market statistics,”
The US PC market shrank 0.4 percent in Q3 2018 and no improvement is expected in the near-term. In fact, once the current Windows 10 upgrade cycle ends in approximately 2020, it’s not clear what, if anything, will replace it. The market may not have stabilized long-term so much as it’s made a temporary pause before heading south again.
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