PC price cuts expected in Europe amid shipments slump

Declining PC shipments in Western Europe during the second quarter of 2012 could result in significant price cuts later this year

By Sophie Curtis, London | Monday, 13 August 2012
Declining PC shipments in Western Europe during the second quarter of 2012 could result in significant price cuts later this year, according to analyst firm Gartner.

PC shipments totaled 13.6 million units in the second quarter of 2012 - a 2.4 percent decline compared with the equivalent period in 2011. Meike Escherich, principal analyst at Gartner, said the Western European PC market recorded weak shipments across all countries.

"Consumer spending on PCs has been stalled by the ongoing economic uncertainty. If demand, especially from consumers, remains weak there might be some old stock left in the channels ahead of the Windows 8 launch in October," said Escherich.

"This could lead to significant price cuts in September, and challenges may arise in selling new products into the channel in the third quarter of 2012."

The situation in the UK was particularly bad, with Gartner recording a 7.6 percent decline in shipments during the second quarter. Both the consumer and professional sectors were affected, according to Ranjit Atwal, research director at Gartner.
With PC vendors under pressure to protect their margins, the top three (Dell, HP and Acer) all had to hold back on price promotions. As a result, they collectively lost more than four percent market share, with all three showing double-digit-percentage declines in shipments.

"The real worry for the UK PC market is whether it will ever return to solid growth," said Atwal.

"Windows 8 and Ultrabooks now look even more important. However, messages emerging from the PC supply chain remain inconsistent and largely uninspiring. This has resulted in the PC channel holding back on new shipment orders until the fourth quarter of 2012."

Overall, HP retained the top position in the Western European PC market in the second quarter of 2012. Acer also held onto second place, while Acer overtook Dell to claim third.

Asus's success was attributed to the company's diversified product portfolio and expansion into Ultrabooks and tablets, while Dell's transformation from a PC supplier to a solution provider for professional markets is yet to result in an increase in market share, said Gartner.