Young Investor

Under the radar: Slowing computer sales

ADARSH GOPALAKRISHNAN | Updated on November 15, 2017 Published on January 14, 2012

Global sales of desktops and laptops fell 1.4 per cent in the October ‘11quarter compared to the year-ago period according to IT Research outfit Gartner. Such a decline is disconcerting especially during the traditionally strong fourth quarter. During this period, PC manufacturers offer discounts and freebies to induce buyers into picking up a new computer.


The holiday season in the US is an important one. In addition to discounts during Black Friday, Christmas and Thanksgiving, all big-ticket gift-giving occasions, manufacturers launch new models. This season included a wide offering including new categories such as ‘ultrabooks'.

This new category looks to give users a sleeker and more durable product featuring the latest processors, and faster hard-disks in an attractive form factor meant to stem losses to tablets such as the Apple IPad. The Ultrabook category is meant to command a premium over traditional laptopsHowever, few buyers have bought into the concept. PC sales in the US dropped by nearly six per cent. The Europe, West Asia and Africa regions fared worse, with sales dropping by seven per cent.


Floods in Thailand in August knocked out a third of the world's hard-disk production capacity, sending hard-disk prices soaring 20-40 per cent. The Asian region, including India, clocked a growth of around 8.5 per cent, far below the anticipated growth. Corporates, though, are projected to have fared better during the fourth quarter than the consumer market as they migrate from the over decade-old Windows-XP based PCs to newer Windows-7.


The Gartner report says that PC sales grew by 0.5 per cent in 2011 to 352.8 million units. A majority of those units ran on Microsoft's Windows software. The troubling part for Microsoft? During the third and fourth quarters, Apple with a newly-launched OS managed to record growth rates upwards of 20 per cent in the stagnant but key US market.

Microsoft's executives believe that Gartner and other estimates may be higher than actual sales numbers. Simply put, Microsoft had a lousier quarter than anyone expected.


What could help Microsoft is the expected release its own tablet-optimised Windows 8 operating system later this year. This is set to go head-to-head against Apple's upcoming IPad 3 and Google's Ice cream Sandwich operating system. Microsoft has the most to lose or gain from this battle. This year will be a crucial one for PC and tablet-makers to gauge which platform (Microsoft or Google) they ought to throw their resources behind.

Hewlett Packard, whose flip-flops in 2011 cost them market share, Dell which slid in the PC pecking order against Lenovo and Acer have serious existential questions to answer in 2012.

The year is also expected to be a crucial one for chip-maker Intel which is expected to launch a power-sipping chip for tablets.

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