PC Doldrums: Quarterly Shipments Hit Lowest Levels Since 2007

Industry soothsayer Gartner said PC shipments have declined by 4.3% in the second quarter. That isn't surprising--the PC market has been in a slump for five years and the last quarter was the 11th straight quarter-on-quarter decline. However, it is surprising that quarterly shipments have dipped to the lowest point in a decade. To put that in perspective, AMD released the AMD Phenom II X6 1100T in 2007. It's been a while.

Things get worse when we zoom in on the stagnant desktop PC market. Vendors shipped 14 million units in the second quarter, which is a 5.7% decline. Surprisingly, Gartner points its finger at Chromebooks, which grew 38% last year compared to the Desktop PC's 6% regression. Gartner predicts Chromebook growth could accelerate if nagging data coverage and offline device capacity issues are improved.

We've seen more excitement in the enthusiast market this year than we've seen in years. The string of new CPU releases is nearly too long to list, and there are several more to come over the next few weeks (hint) and months. Unfortunately, the string of new processor releases hasn't had a significant impact on the desktop PC market. The OEM market isn't that exciting, but it fuels the economies of scale that enable lower pricing, so the ill wind blowing over the PC market eventually has an impact on the enthusiast market in one way or another.

Component shortages are exacerbating the problem. The industry is weathering SSD, DRAM, and LCD panel shortages, all of which have an impact on pricing. Gartner says some OEMs are absorbing the higher component costs, but others are merely passing on the pain in the form of higher prices. That leads to depressed sales figures.

HP is one of the few vendors doing well; it surpassed Lenovo to take the pole position and has enjoyed five quarters of steady growth. Dell is also doing well with five successive quarters of growth, while Lenovo suffered its second quarterly decline. Meanwhile, Apple also suffered a 9.6% decline in Mac sales, while Asus suffered the biggest quarterly drop. Asus' shipments declined by 40.7% last quarter. That's a pretty stunning drop, but there is no clear explanation why the company had such a severe downturn.

IDC also weighed in with its own version of events, but the overall trend is the same. IDC notes that last quarter the PC market declined 3.3% year-over-year, which is better than its initial 3.9% prediction. IDC also cites component shortages as one of the key aggravating factors.

We should see NAND supply increase through the tail end of the year, largely because SanDisk/Toshiba's 3D BiCS NAND is finally shipping in significant volume. That should help ease SSD pricing. Unfortunately, we shouldn't expect DRAM pricing to level off anytime soon, which doesn't bode well for the chances of a speedy PC recovery.

Paul Alcorn
Managing Editor: News and Emerging Tech

Paul Alcorn is the Managing Editor: News and Emerging Tech for Tom's Hardware US. He also writes news and reviews on CPUs, storage, and enterprise hardware.

  • dstarr3
    I'm going to blame the usual culprit of simply a lack of necessity. Computers have been marching along as usual, getting more and more powerful. But the software that most people run just doesn't demand all the power we've been adding. That 8-year-old e-machine isn't going to run Crysis so hot, but if you just need e-mail, YouTube, spreadsheets and docs, not a problem. Software demands have not kept up with hardware potential for the average user. Which is a good problem to have, really. But it just means that it takes a lot longer for that old PC to reach obsolescence.
  • gangrel
    And even the next, slight workload increase...videos and streaming. I'll start streaming the WSOP main event here shortly, on a 5th gen Intel NUC...but just an i3. Not 8 years old, but very basic little box that's, what, 3 years old now.

    And even if we don't go back 8 years...Ivy Bridge is now 5 years old.
  • 10tacle
    Two things. First, as the guy said above, there's not a need to upgrade like in years past. I recently built a new i7 Kaby Lake for a friend who had been running a Sandy Bridge i7 Dell XPS for six years, having only upgraded his GPU once from an Nvidia GTX 570 to a GTX 970. He needed nothing more with gaming at 1080p.

    Second, I'd like to see a comparison of individual component sales, specifically CPU, motherboard, GPU, and memory. I know that's difficult to obtain because resellers generally don't like to give that out for competition sake. Also it's difficult to actually define what a "PC shipment" would be vs. say an individual bad component replacement or a complete CPU/motherboard/memory upgrade which would IMO define as a "PC shipment." I'd leave GPUs out of the mix due to the extreme variation spike of sales by cryptocurrency miners.
  • InvalidError
    Entry-level PCs are a dying breed - the vast majority of non-gamers/non-enthusiast/non-professionals I know don't need a PC, they can already do everything they need to do on their phone, tablet, Chromebook and equivalents. If I didn't do PC gaming and engineering, I'd still be using my Core 2 E8400 and HD3650 today instead of an i5 with GTX1050.
  • bit_user
    Actually... somehow, 2007 levels doesn't sound so bad.

    Apple also suffered a 9.6% decline in Mac sales
    Ah, so there is a silver lining to this story!

    while Asus suffered the biggest quarterly drop. Asus' shipments declined by 40.7% last quarter.
    Ouch! So, is this only for complete PCs, and not including their components business? Maybe they saw the writing on the wall and are retrenching to focus on the more profitable market niches.
  • bit_user
    19938862 said:
    who had been running a Sandy Bridge i7 Dell XPS for six years, having only upgraded his GPU once from an Nvidia GTX 570 to a GTX 970.
    I'm still rocking dual Sandybridge i7's. One with integrated graphics, the other is Extreme (E5 Xeon, actually) with a GTX 980 Ti. Both have SSDs - the second one is using an Intel 750 NVMe SSD (Data Center equivalent).

    I plan to upgrade the second one to either a Kaby-X i9 (if they switch to solder) or a Ryzen+ and also when SSDs based on Intel/Micron's 3D XPoint are cheap & big enough to compete with the high end of NAND storage.

    I have no plans to upgrade the first Sandybridge. It does everything I need, with no signs of lagging. The last upgrade it had was from 4 GB to 8 GB of RAM. It replaced a 3.2 GHz Pentium 4. So, I've been known to rock some old hardware.

    I'm still trying to hold off on any monitor upgrades until OLED hits the mainstream. Then, probably a GTX 1180 Ti to make it sing @ 4k.
  • the nerd 389
    Regarding Asus, I have worked with about 5 Asus laptops over the past 6 years. Of those, exactly one is still working. It's the oldest one. All of the newer ones have failed within either two years (3-4 years old), or one year (0-2 years old).

    It's Asus' own fault for having such depressing numbers.
  • Kennyy Evony
    i still have my dual-core centrino laptop from HP, it wifi card is outdated cant play any of the new games cant play a lot of the hd streams from the web but works well for everything else never had any issues.
  • bit_user
    19943370 said:
    i still have my dual-core centrino laptop from HP,
    My old HP zt3000 (based on Compaq x1000) was the bomb, BITD. I tried upgrading the HDD to a SDD, upgrading the CPU, and maxing out the RAM. Sadly, it's hampered by poor video acceleration in Linux. Plus, the HDD is still PATA.

    So, I finally upgraded and got a Skylake laptop with integrated graphics. I figure that should be supported much better, longer. Other benefits were that it cost & weighs half as much as my old laptop. Screens on both are 1920, but the old one was 15.4" and now I went down to 13.3', in the interest of portability.

    Also, my new Thinkpad's wireless works flawlessly on Linux. Never could get the old laptop's wireless to work in Linux, but its Ethernet actually worked much better in Linux.
  • bigdragon
    The only companies producing worthwhile desktop upgrades are AMD and Nvidia. There's very little point to buying a whole desktop computer when you need to buy individual components from these two companies. No surprise that the desktop PC is declining. I think 10TACLE is right -- we need to see component sales to tell just how good or bad the desktop is faring right now.

    I'm not sure that the desktop PC is going to recover in its current form. I think we're looking at a future where dock-able laptops and tablets get paired up with eGPUs and continue to erode the desktop market.