Gartner, IDC Pin Blame on Intel for PC Market’s Continued Downturn

The PC market shrank substantially in Q1 according to both Gartner and IDC. Both firms blame Intel for the downturn, over and above other factors like seasonality or economic concerns.

“We saw the start of a rebound in PC shipments in mid-2018, but anticipation of a disruption by CPU shortages impacted all PC markets as vendors allocated to the higher-margin business and Chromebook segment,” said Mikako Kitagawa, senior principal analyst at Gartner. “The supply constraints affected the vendor competitive landscape as leading vendors had better allocation of chips and also began sourcing alternative CPUs from AMD.”

IDC was a little more circumspect in its own analysis, noting that “Although the shortage of Intel processors, mostly at the lower end, remained a factor in seeing a contraction in 1Q19, the market performed better than expected with most regions exceeding forecast. Stronger than expected desktop shipments further boosted volume, coming on the heels of a tough previous quarter, (4Q18), which had lackluster consumer demand and desktop supply issues. Furthermore, more PC brands turned to AMD chips.”

The long-term downturn in the PC market has been disastrously bad for PC manufacturers who aren’t one of the major names, and that trend appears to be continuing. The slide below is older, but shows how much the white-box share of the PC market has declined since 2011:

The sales restrictions on the larger market that have been caused by Intel’s CPU shortages are expected to have driven additional sales to AMD. There have been reports of more AMD Chromebooks hitting the channel, powered by older Bristol Ridge products, and AMD’s share of the mobile market was expected to peak in Q2 2019. Intel’s capacity problems are expected to ease in the back half of the year, around the same time corporate PC purchases are expected to start picking up. The end of support for Windows 7 and the need to purchase fresh Windows 10 hardware is expected to boost sales later this year. New 7nm CPU refreshes from AMD and Intel’s own introduction of 10nm hardware (expected by the holidays 2019) could also unlock some sales.

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