Gartner & IDC Q1 PC Shipment Data Paint Different Pictures
Zacks Investment Research | Apr 11, 2018 09:24PM ET
Data compiled by independent research firms — Gartner Inc. (NYSE:IT) and International Data Corporation (“IDC”) – shows mixed results for PC shipments in first-quarter 2018. The figures as well as opinions of the two research firms are widely different.
The preliminary data released by Gartner depicts that PC shipment in the quarter shrunk 1.4% year over year to 61.7 million units. This also marks the 14th straight quarter of year-over-year fall — the longest duration of decline in the PC industry’s history.
Gartner noted that sluggish shipment in the Asia/Pacific region, particularly in China, resulted in the decline. Per Mikako Kitagawa, principal analyst at Gartner, “Some state-owned and large enterprises postponed new purchases or upgrades, awaiting new policies and officials’ reassignments after the session of the National People’s Congress in early March” resulting in a lackluster demand across China’s business market.
This apart, Kitagawa also mentioned that vendors have been waiting for Intel’s (NASDAQ:INTC) new eighth generation core processors, thus, taking a cautious approach toward overstocking. Also, some inventory carryover from fourth-quarter 2017 impacted first-quarter 2018 shipment.
Nevertheless, IDC has a different view. Per the research firm, the PC market continued to display a stabilizing trend, with shipment remaining flat at 60.4 million units during the quarter as compared with the year-ago quarter.
The results indicate that PC vendors have been benefiting from continued upgrades to Windows 10 systems by business community and elevated demand for premium notebooks from consumer as well as commercial segments, per the research firm.
We believe the disparity in data and comments might be due to the different techniques used by the firms for tracking PC sales, as well as the inclusion and/or exclusion of certain products, specially Chromebooks, which run on Alphabet Inc.’s (NASDAQ:GOOGL) Chrome operating system.
Notably, unlike Gartner, IDC includes Chromebooks. Gartner, on the other hand, takes into account Microsoft Corporation (NASDAQ:MSFT) tablets and detachable, such as the iPad Pro and the Asus Transformer.
Different Takes on Component Prices
The firms have different take on component prices. Per Gartner, material prices are still rising as “component companies remain cautious about expanding their production capabilities” due to softness in the smartphone market and prevailing uncertainty in the PC market.
This has resulted in escalated average selling prices (ASPs) of PCs. Kitagawa further noted, "With fewer people buying new machines, manufacturers need to get the highest profit margin from each sale. To do that, they are raising the selling points and focusing on customer experience or perception of value."
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On the contrary, per IDC, pricing has eased as component supply has improved from the first-quarter 2017 level.
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