PC shipments in Europe, the Middle East, and Africa (EMEA) contracted further than expected in the first quarter of 2011 (1Q11) as a result of continued softness in demand and persisting inventory levels in the distribution and retail channels, which constrained vendor "sell in" levels.
According to the International Data Corporation (IDC) Europe, Middle East and Africa Quarterly PC Tracker, EMEA PC shipments declined 9.6% year over year in 1Q11 on shipments of 24.1 million units across the region. Western Europe shipment levels contracted by 17.5% compared with 1Q10, directly impacted by continued softness in the consumer segment, while the commercial segment held better, driven by ongoing renewals in the corporate space. Growth in Central and Eastern Europe and Middle East and Africa regions remained positive, albeit at moderate levels, with 5.5% and 6.3% gains, respectively.
While market contraction was expected after the strong growth recorded in 1Q10, demand remained soft and did not suffice to absorb the accumulated inventory from the fourth quarter of 2010, constraining most vendors' "sales in" through the quarter. The recall of Sandy Bridge systems also added to the disruption by means of canceled and delayed orders, and did not help drive additional demand from either users or channel partners.
"Continued softness in the consumer space remains the primary reason behind this quarter's shortfall across most countries in Western Europe. The current momentum around Media Tablets, as well as Smartphones, clearly continued to drive consumers' attention away from PCs, shifting spending to these hot new devices while PC renewals are put on hold. However this "wait and see" attitude is temporary, as PCs remain a must-have and the primary computing platform in the home." said Eszter Morvay, research manager in IDC's EMEA Personal Computinggroup.
The commercial market, particularly the corporate space, held up better in 1Q11, driven by continued recovery in enterprise renewals in several countries. But challenging economic conditions continued to affect SMB demand levels, prompting businesses to remain cautious with investments. The situation in the Middle East also had an impact on market behavior this quarter, but the market proved more resilient than expected.
"Despite the political unrest in the Middle East and Africa (MEA) region during the first months of the year, the PC market performed well above expectations, driven by demand in the consumer notebook space in addition to a few large deals that took place across the region. The MEA PC market reported a year-on-year growth of 6.3% in 1Q11, with portable PCs growing by 13.4% in comparison to weaker results of -3.5% growth reported in the desktop segment. On the other hand, the Central and Eastern Europe (CEE) region, which was forecasted to perform stronger, reported year-on-year growth of just 5.5%. The CEE region performed below expectations due to high inventory stock inhibiting growth. The notebook space suffered the most from the channel inventory build up during the second half of 2010," said Stefania Lorenz, research director, Hardware and Systems Research, IDC CEMA.
The EMEA PC market will remain constrained in 2011 directly impacted by the consumer spending shift and cautious SMB investments, but will benefit from a more favorable year-on-year comparison in 2H11.
"Media tablets will undoubtedly continue to disrupt the EMEA PC market this year and the momentum is not expected to slow down in the second half 2011 as more products will come to market in 2Q and sales will boom during the back-to-school and Christmas seasons. However, with more than 22 million media tablets expected to be sold in EMEA this year, and a net new market opportunity estimated of over 15 million devices, the industry will actually benefit from a higher combined market growth opportunity than in 2010," said Karine Paoli, Associate Vice President, IDC EMEA Systems and Infrastructure solutions.
Vendor Highlights
HP maintained leadership across EMEA despite a decline of 8.4% in overall shipments directly impacted by slow consumer demand and inventory levels in the retail channel in Western Europe. However, HP delivered an outstanding performance in the commercial space and continued to drive share consolidation and an effective push across both enterprise and SMB segments.
Acer continued to be severely affected by persisting inventory levels and slowing demand, which resulted in year-over-year growth of -25.2% in the vendors' shipment levels across the region. The vendor suffered a major drop across all desktop, notebook, and netbook product lines in Western Europe, while growth was also constrained in the CEE and MEA regions.
Dell recorded a softer decline than the market thanks to the larger share of commercial shipments in the vendor's mix and continued growth in the emerging markets. Consumer sales also declined significantly, but Dell continued to benefit from the corporate market recovery and drive continued expansion in both the CEE and MEA regions.
Asus maintained the number 4 position, but its performance was adversely affected by constrained consumer demand and inventory levels in the channel resulting in a contraction of 8.4% in the vendor's 1Q11 shipments. Growth was affected across both Western Europe and the CEE region, partially offset by expansion in MEA.
Samsung recorded the only positive growth among the Top 5 vendors in 1Q11, driven again primarily by the vendor's continued expansion into the CEMA region, as volumes remained constrained in Western Europe.
Beyond the Top 5, and among the additional performances to be underlined: Lenovo maintained the number 6 position with a good performance driven by sustained growth in the commercial space. Toshiba held on to the number 7 position, but remained constrained by the overall inventory situation in the channel, while Apple continued to benefit from continued momentum around the iPad and Apple branding and regional expansion.
Notes:PC 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.
For more information on IDC's EMEA Quarterly PC Tracker or other IDC personal computing research services, contact Associate Vice President Karine Paoli on +44 (0) 20 8987 7218 or at kpaoli@idc.com. Alternatively, contact your local IDC office or visit www.idc.com.
According to the International Data Corporation (IDC) Europe, Middle East and Africa Quarterly PC Tracker, EMEA PC shipments declined 9.6% year over year in 1Q11 on shipments of 24.1 million units across the region. Western Europe shipment levels contracted by 17.5% compared with 1Q10, directly impacted by continued softness in the consumer segment, while the commercial segment held better, driven by ongoing renewals in the corporate space. Growth in Central and Eastern Europe and Middle East and Africa regions remained positive, albeit at moderate levels, with 5.5% and 6.3% gains, respectively.
While market contraction was expected after the strong growth recorded in 1Q10, demand remained soft and did not suffice to absorb the accumulated inventory from the fourth quarter of 2010, constraining most vendors' "sales in" through the quarter. The recall of Sandy Bridge systems also added to the disruption by means of canceled and delayed orders, and did not help drive additional demand from either users or channel partners.
"Continued softness in the consumer space remains the primary reason behind this quarter's shortfall across most countries in Western Europe. The current momentum around Media Tablets, as well as Smartphones, clearly continued to drive consumers' attention away from PCs, shifting spending to these hot new devices while PC renewals are put on hold. However this "wait and see" attitude is temporary, as PCs remain a must-have and the primary computing platform in the home." said Eszter Morvay, research manager in IDC's EMEA Personal Computinggroup.
The commercial market, particularly the corporate space, held up better in 1Q11, driven by continued recovery in enterprise renewals in several countries. But challenging economic conditions continued to affect SMB demand levels, prompting businesses to remain cautious with investments. The situation in the Middle East also had an impact on market behavior this quarter, but the market proved more resilient than expected.
"Despite the political unrest in the Middle East and Africa (MEA) region during the first months of the year, the PC market performed well above expectations, driven by demand in the consumer notebook space in addition to a few large deals that took place across the region. The MEA PC market reported a year-on-year growth of 6.3% in 1Q11, with portable PCs growing by 13.4% in comparison to weaker results of -3.5% growth reported in the desktop segment. On the other hand, the Central and Eastern Europe (CEE) region, which was forecasted to perform stronger, reported year-on-year growth of just 5.5%. The CEE region performed below expectations due to high inventory stock inhibiting growth. The notebook space suffered the most from the channel inventory build up during the second half of 2010," said Stefania Lorenz, research director, Hardware and Systems Research, IDC CEMA.
The EMEA PC market will remain constrained in 2011 directly impacted by the consumer spending shift and cautious SMB investments, but will benefit from a more favorable year-on-year comparison in 2H11.
"Media tablets will undoubtedly continue to disrupt the EMEA PC market this year and the momentum is not expected to slow down in the second half 2011 as more products will come to market in 2Q and sales will boom during the back-to-school and Christmas seasons. However, with more than 22 million media tablets expected to be sold in EMEA this year, and a net new market opportunity estimated of over 15 million devices, the industry will actually benefit from a higher combined market growth opportunity than in 2010," said Karine Paoli, Associate Vice President, IDC EMEA Systems and Infrastructure solutions.
Vendor Highlights
HP maintained leadership across EMEA despite a decline of 8.4% in overall shipments directly impacted by slow consumer demand and inventory levels in the retail channel in Western Europe. However, HP delivered an outstanding performance in the commercial space and continued to drive share consolidation and an effective push across both enterprise and SMB segments.
Acer continued to be severely affected by persisting inventory levels and slowing demand, which resulted in year-over-year growth of -25.2% in the vendors' shipment levels across the region. The vendor suffered a major drop across all desktop, notebook, and netbook product lines in Western Europe, while growth was also constrained in the CEE and MEA regions.
Dell recorded a softer decline than the market thanks to the larger share of commercial shipments in the vendor's mix and continued growth in the emerging markets. Consumer sales also declined significantly, but Dell continued to benefit from the corporate market recovery and drive continued expansion in both the CEE and MEA regions.
Asus maintained the number 4 position, but its performance was adversely affected by constrained consumer demand and inventory levels in the channel resulting in a contraction of 8.4% in the vendor's 1Q11 shipments. Growth was affected across both Western Europe and the CEE region, partially offset by expansion in MEA.
Samsung recorded the only positive growth among the Top 5 vendors in 1Q11, driven again primarily by the vendor's continued expansion into the CEMA region, as volumes remained constrained in Western Europe.
Beyond the Top 5, and among the additional performances to be underlined: Lenovo maintained the number 6 position with a good performance driven by sustained growth in the commercial space. Toshiba held on to the number 7 position, but remained constrained by the overall inventory situation in the channel, while Apple continued to benefit from continued momentum around the iPad and Apple branding and regional expansion.
Notes:PC 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.
For more information on IDC's EMEA Quarterly PC Tracker or other IDC personal computing research services, contact Associate Vice President Karine Paoli on +44 (0) 20 8987 7218 or at kpaoli@idc.com. Alternatively, contact your local IDC office or visit www.idc.com.
