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Festive delight: PCs are back in fashion; here's why you should get one before prices go up in December

Thanksgiving gifting and back-to-school purchases traditionally help drive PC sales around this time.

, ET Bureau|
Last Updated: Oct 17, 2019, 02.33 PM IST
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There might be more to the sudden resurgence of personal computers.
Everything is getting smaller in the world of electronics, but personal computers (PCs) seem to be bucking this trend. PC-manufacturers witnessed robust sales growth in third-quarter shipments, with consumers making a beeline for to upgrade their hardware. PCs are back in fashion, but there might be more to the sudden resurgence.

Microsoft Corp has released a significant upgrade to its Windows software. The new version will come pre-loaded in new machines. More importantly, strained ties between the United States and China has sparked fears that the next round of tariffs could drive the prices of PCs.

It remains to be seen whether the sales growth will be sustained in the fourth quarter, given that it coincides with the fag end of the upgrade cycle – a window where people upgrade their devices as new software is not designed to run on older hardware. Moreover, if a trade deal between the U.S. and China falls through, new tariffs could be slapped on goods originating from China, as soon as December.
Agencies
PC shipments rose to 70.9 million units in Q3.
PC shipments rose to 70.9 million units in Q3.

Some hardware manufacturers have gradually shifted their production bases to Vietnam, Taiwan, and Thailand to skirt tariffs. PC-makers will be hopeful that the sudden surge in demand is not a flash in the pan. The fourth quarter of a financial year coincides with the festive season, a time of greater consumer spending.

According to preliminary data compiled by the analytics and research firm Canalys, PC shipments rose to 70.9 million units in Q3. This represents a 4.7 per cent increases on a year-on-year basis, and the best third-quarter performance since 2015. Thanksgiving gifting and the back-to-school purchases have traditionally helped drive up Q3 sales.

Lenovo, HP and Dell consolidated their dominant position, cumulatively accounted for over 50 per cent of total sales. Apple’s iMac had 7.6 per cent of the overall market share. Canalys’ numbers are corroborated by that of International Data Corp. (IDC), which found that PC shipments in Q3 touched 70.4 million, up 3 per cent from last year. According to IDC data, this was the strongest quarter on record since Q4 2017 when 70.8 million PCs were shipped.

Agencies
Lenovo, HP and Dell consolidated their dominant position.
Lenovo, HP and Dell consolidated their dominant position.

Gartner was more tempered in its evaluation, saying that shipments clocked 68.1 million units, growing only 1.1 per cent over the same period last year. It attributed the enhanced demand to the Windows 10 refresh cycle. With original equipment manufacturers (OEMs) diversifying their production bases to countries with favourable tax regimes, the cost of components has gone down, showing up manufacturers’ profit margins.

The divergence in the sales numbers put out by analytics firms can be attributed to differences in the way each company defines PCs. Some hardware manufacturers have included tablets under the umbrella of personal computers, making it harder to gauge absolute sales numbers. The recent spike in sales was highest in Japan, where a new sales tax regime came into effect in October.

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