Windows XP deadline provides silver lining to slumping PC market

PC shipments fell by 7.6 percent during Q3, performing better than IDC's original projection of a 9.5 percent drop

The PC market remained weak in the third quarter, but the expiration of Microsoft's support for Windows XP in April next year may have prompted users to look at upgrades, which eased the slump.

About 81.6 million PCs shipped during the third quarter this year, falling by 7.6 percent compared with the same quarter last year, according to research released on Wednesday by IDC. The company earlier projected a decline of 9.5 percent during the quarter.

Business purchases boosted PC shipments, and enterprises are considering upgrades to Windows 7 as support for XP nears an end, said Jay Chou, senior research analyst at IDC.

"There was a consumer upgrade cycle that is not happening right now," Chou said. "The commercial cycle is different... we are seeing more businesses, and to some extent public sector firms, that have PC upgrade projects."

There is a big upgrade cycle under way in Japan, "where there's a higher installed base running XP," Chou said.

PC makers are urging users to upgrade laptops before support expires for XP. Business laptops are being offered with the popular Windows 7 or the touch-centric Windows 8, which has not sold well.

PC makers in the U.S. also stocked up on computers with Microsoft's upcoming Windows 8.1, with products expected to ship later this month. Windows 8.1 has more features, such as the "Start" button, that make it a more palatable OS than Windows 8, and the price of touchscreen laptops also is falling, Chou said.

The growing adoption of smartphones and tablets as computing devices also contributed to the decline in PC shipments, Chou said.

Economic indicators are improving in some regions, including the U.S., but the PC market has by no means recovered, Chou said. Shipments will decline through the end of 2014, after which recovery may start, Chou said.

Lenovo remained the top PC maker, followed by Hewlett-Packard and Dell, and the companies recorded slight growth in shipments. Acer and Asus rounded out the top-five list. Those vendors recorded sharp PC shipment declines of 34.5 percent and 34.1 percent, respectively.

Lenovo's shipments totaled 14.1 million units during the third quarter, growing by 2.2 percent, and the company had a 17.3 percent market share. HP's shipments totaled 13.99 million units, growing by 0.4 percent, for a 17.1 percent market share. Dell's shipments totaled 9.52 million units, growing by 0.3 percent, for an 11.7 percent market share.

PC shipments for HP and Dell had been declining in the past few quarters. But a strong U.S. market and strong product offerings have helped the companies rebound, Chou said.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

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