PC Makers Hope Windows 8 Will Revive Sales

PC makers, jilted of late by consumers attracted tablets and smartphones, are pinning their hopes a change fortunes on the October launch of the Windows 8 operating , announced last week.

But industry executives and analysts warn the chill of a slowing global economy could quash those hopes. in previous downturns, such as in aftermath of the 2008 financial crisis, consumer demand new electronic gadgets appears to no be decoupled from the state of broader economy.

Worldwide PC shipments fell to 87.5m units the second quarter, according preliminary figures released by the research firm Gartner last week. The 0.1 per cent decline a year earlier represented the seventh consecutive quarter of virtually flat to single- growth.

Acer, the world’s third-largest computer vendor unit shipments, had previously forecast 10 cent annual growth in the number of computers it ships. That has now been trimmed zero to 5 per cent growth, according to company source.

“Uncertainties in the economy various regions, as well as consumer’s low interest PC purchases, were some of the key influences, said Mikako Kitagawa, analyst Gartner.

Kirk Yang, head of Asia ex-Japan tech hardware research Barclays, says PC makers’ ability to excite consumers will be key their success at a when cutbacks in corporate and government budgets have been hurting PC sales.

Consumers “don’t have to buy – I’m sure everybody’s PC works today, everybody’s mobile phone still works – but they rush to buy an iPhone 5 or Samsung Galaxy because it’s something exciting,” said Mr Yang.

So , it appears that the supply chain is not betting that happening. For the third quarter, the Taiwanese companies that manufacture than 90 per cent of the world’s notebook PCs forecasting an average of 7 per cent quarter--quarter unit growth, below their historic average of 21 per cent growth, says Jenny Lai, analyst with HSBC.

Economists with HSBC expect overall Asian electronics production grow just 1.5 per cent in August, below the three-year average of 3.7 cent growth.

Asian PC brands are still faring better their US counterparts. HP lost two percentage of global market share a year earlier, falling to 14.9 per cent in the second quarter, China’s Lenovo gained two to become a second with 14.7 per cent. Dell dropped to fourth as it overtaken by Taiwan’s Acer, whose compatriot Asus closed fifth with near-40 per cent growth in market .

HP has restructuring after reversing a plan to spin its PC business, while Dell has been focusing on software and services, but both are responding to long-, low-margin problems and the eastward shift of the PC business, to Ms Kitagawa.

“It’s very difficult for HP and Dell to compete Asian companies now, Lenovo can live much lower margins than they can,” she told the Financial Times.

, the entire market needs catalysts growth and the news from Microsoft that PCs featuring Windows 8 would be able to go sale in October could provide a boost in the fourth , although some analysts remain pessimistic.

“People are not bracing a strong second half,” says William Dong, head of Taiwan securities for UBS. “There’s a chance only we start to look to the 2013 outlook, and there’s a lot of ifs and buts that.”

HSBC’s Ms Lai points that sales data from prior launches of new Windows versions show evidence that buyers had postponed their purchases after the launches. Christine Wang, an analyst Daiwa, points out that Windows 8 is designed mostly tablets and might have a limited impact PC notebook sales.


Adapted and abridged from: CNBC, July 15, 2012.