PC shipments in Europe, the Middle East, and Africa (EMEA) continued to contract in 2Q11 as sustained high levels of inventory inhibited stronger sell-in, particularly in Western Europe, and led to a decline of 8.9% in overall shipments across EMEA compared with the same quarter last year.
A shift in interest and budget toward other products continued to contribute to weak consumer demand and slow stock depletion across Western Europe, But CEE and MEA continued to expand and enjoy positive growth, performing even better than expected, driven by robust demand for portable PCs.
Western Europe shipment levels further decelerated, recording a decline of 20.9%, impacted by persisting high inventory levels and slow consumer demand across the region which prevented stronger sell-in from most vendors.
The situation improved and stock depletion continued, but low retail traffic and a continued shift in budget and interest toward other devices, particularly new media tablets and smartphones, continued to contribute to PC purchases being postponed and led to a contraction of 32.2% in consumer sell-in, affecting both desktop and portable PC form factors.
While inventory levels improved, slow consumer demand continued to prevent faster stock depletion and continued to inhibit vendor sell-in. Despite the seasonal impact of the back-to-school and Christmas periods, consumer demand is likely to remain lackluster and geared toward media tablets, as a plethora of new models was launched in 2Q with many more to follow in the coming months.
Broader product availability and choice will drive fierce vendor competition, which is likely to lead to a price battle, making these devices more affordable for a wider audience.
Commercial demand fared better and recorded a softer 4.3% decline, albeit slower than anticipated due to rising concerns about the deteriorating economic climate. Corporate renewals continued to feed some level of demand, but SMB purchases remained cautious, with many businesses holding on to their spending, while the uncertain economic situation in the eurozone contributed to a further drop in public investments.
Southern Europe remained the most impacted, with severe contractions in Spain and Italy, while other key economies, including France and Germany, fared only marginally better, aided by more sustained commercial investment levels, but they remained severely constrained by slow consumer demand.
Although no major rollout has started just yet, we’re seeing very encouraging signs for Windows-based slate tablet adoption. It is estimated that in 2Q close to 20,000 slate tablets shipped in the Western European commercial segment, compared with just 5,000 during the same quarter last year.
Vertical sectors with field workers, such as utilities, transport, and healthcare, have always represented a key growth opportunity, and current product expansion and improvement could well support accelerated penetration.
CEMA markets, however, continued to expand and enjoy positive growth, partially offsetting the slowdown in Europe and contributing to overall EMEA results.
The PC market in Central and Eastern Europe [CEE] performed above expectation, resulting in year-on-year growth of 11.4%, driven by strong notebook demand across both consumer and commercial segments. Desktop sales remained buoyant thanks to PC spending within the commercial space.
The countries that performed stronger than previously expected were the largest ones, Russia and Poland, contrasting with Czech Republic, Slovakia, and Bulgaria, which performed poorly, with a key factor preventing those countries from performing better being persisting high inventory.
The Middle East and Africa region [MEA] reported PC growth of 12.2% year on year, just above the forecast. Despite the political turmoil, the region continued to report healthy results, driven by portable sales. Consumer demand was the major growth driver as commercial demand remains soft.
HP maintained strong leadership and further consolidated its market share in EMEA, thanks to robust performance across all subregions. Adding to strong results in CEMA, the vendor also enjoyed solid performance in Western Europe, supported by sustained double-digit growth in the commercial segment. However, consumer shipments continued to contract, affected by weak consumer demand and high inventory levels.
Acer held on to second place but continued to be severely affected by high inventory buildup accumulated over the past year, leading to a major contraction of vendor shipment levels again this quarter. Although sell-in was significantly constrained, sell-out showed better results, driven by a major one-off boost of $150 million to help the channel shift inventory.
Dell enjoyed a strong quarter and returned to positive growth, thanks to robust expansion in CEMA. The vendor also outperformed growth in Western Europe, although stronger results were constrained by weaker than anticipated demand across both consumer and commercial segments.
Asus maintained fourth place, but continued to gain market share, thanks to strong growth in CEMA. Its performance in Western Europe, however, remained adversely constrained by weak consumer demand and high inventory levels in the channel.
Lenovo regained fifth position in the overall ranking, primarily due to robust expansion in CEMA. The vendor maintained positive growth overall, but momentum slowed in Western Europe, with a sharp drop in consumer sales, limiting the vendor’s overall performance this quarter.
Most vendors suffered from the slowdown in demand and inventory situation, recording declines in Western Europe; this includes Samsung, in sixth position, although its performance was offset by strong results in CEMA which enabled it to continue to gain share in the region. Apple was the only vendor to record positive growth in Western Europe, reinforcing its seventh position in the overall EMEA ranking.
Toshiba and Sony were both constrained but maintained eighth and ninth positions respectively, while Fujitsu maintained positive growth in 10th position thanks to the success of its “LifeBook for Life” program.