EMEA PC Market Rebounds Despite HDD Shortage

Despite sustained economic uncertainty and the expected impact of HDD shortages, the PC market in EMEA displayed a positive rebound in the first quarter of 2012, with overall shipments increasing by 7.6% compared to the same quarter last year, according to IDC Corp.

The market has clearly benefited from a favorable year-on-year comparison versus 1Q11, when sell-in dropped significantly due to a major inventory build-up in the channel. However, IDC expected the market to remain constrained in light of the HDD shortages following the flooding in Thailand last year, which created a shortfall of approximately 50 million HDDs worldwide. But the impact from the shortage was more moderate than anticipated and improvement in sell-in was across the board, with all three subregions posting stronger than expected results across both desktop and portable form factors and across both consumer and commercial markets.

"Although the rebound in Western Europe remained moderate compared to emerging markets, with overall PC shipments increasing by 1.8%, all countries displayed healthier sell-in results than anticipated", said Eszter Morvay, research manager, IDC EMEA Personal Computing. "Denmark and Sweden recorded the highest growth at double-digits, while the U.K. also experienced a healthy rebound of 8%. France remained soft at -0.1% while Germany posted a sustained 6.1%. But most surprisingly the debt-stricken Spain has also shown a major improvement in sell-in, posting a soft decline of just 2.3%."

The market remained constrained overall by the pressure of the escalating debt crisis across the eurozone, leading to shrinking disposable income for consumers and tighter budgets and caution regarding business investments. In fact, sales out continued to decline in the distribution channel, indicating that demand remained weak. But a favorable year-on-year comparison, coupled with vendors regaining access gradually to HDD supply supported sell-in improvement throughout the quarter. While the channel is likely to have remained cautious when placing orders to avoid an inventory build-up similar to last year, the fear of a prolonged supply constraint due to the HDD shortage coupled with expectations of price increases may have also led to some panic-buying since November, which contributed to increased sell-in in 1Q12.

"Contrary to the initial expectation of the negative impact of HDD shortages, the PC market in both Central Eastern Europe and Middle East and Africa exceeded expectations and recovered with annual growth of 18.3% and 13.5%, respectively," said Stefania Lorenz, research director, IDC CEMA. "The CEMA region reported total PC volume of 12.08 million with 50:50 share between the two regions. Desktop shipments contracted in both regions, but the portable PC market was a clear winner, with annual growth of over 30% for both regions combined. CEE had a stronger increase of 35.7% year-on-year while MEA grew by 24.7%. As the HDD shortage relaxed in early 2012, vendors were able to increase orders on PCs and distributors were satisfied to place larger orders, having lower stock levels, with March confirming to be the healthier month of the quarter. Entry-level products were the favorite, with aggressive price points from most vendors."

Vendor Highlights

• HP maintained a strong leadership and continued to consolidate market share across EMEA. The vendor’s performance was driven by robust expansion in CEE and MEA, but results in Western Europe also returned to positive, thanks to the recovery of commercial desktop volumes and a favorable year-on-year comparison in the consumer portable market.
• Acer remained in second place, posting positive growth following five consecutive quarters of decline. Recovery was driven by emerging markets, while Western Europe continued to contract, due to a further drop in mini-notebook volumes.
• Dell maintained third place, reporting healthy growth in EMEA, driven by robust expansion in CEE in particular. Results in Western Europe also improved, benefiting from a more favorable year-on-year comparison and healthy growth in the commercial segment.
• ASUS held fourth place, posting double-digit growth in EMEA and gaining share across all subregions. Although mini-notebook sales continued to drop, robust increases in mainstream notebook volumes has offset the decline.
• Lenovo maintained fifth place, reporting the highest growth among the top 10 vendors. Although the vendor continued to expand across the emerging markets, growth this quarter was driven by Western Europe. Leveraging from the Medion acquisition, Lenovo further expanded in the consumer segment, while also gaining share in the commercial space.
• Toshiba remained in sixth place, posting a healthy recovery following four quarters of negative trends. Samsung reported another quarter of negative trends, due primarily to a sharp drop in mini-notebook sales, which was not offset by the strong recovery of mainstream notebook volumes.
• Apple continued to enjoy strong demand across all its product ranges.
• Fujitsu moved to ninth place in the overall ranking, as the LifeBook campaign has been clearly paying off.
• Sony dropped to tenth place and continued to be adversely impacted by the HDD shortage, recording a double-digit decline in EMEA.

                 Top 5 Vendors: EMEA) PC Shipments*
                        1Q12 (Preliminary) (000 Units)

 (Source: IDC EMEA Quarterly PC Tracker, Preliminary Results,
 1Q12, April 18, 2012)
 *PC shipments = desktop and notebooks.

Shipments are branded shipments for all form factors (including desktops and notebooks) and exclude x86 servers as well as OEM sales for all vendors. Data for all vendors is reported for calendar periods.