The only PC maker escaping the crunch

April 11, 2013: 2:44 PM ET

Lenovo is the single PC manufacturer that is doing well. And even that company's worldwide sales are flat.

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FORTUNE -- Let's say the definition of "PC" is the same one we applied five years ago, before tablets. By that definition, the market seems to be collapsing.

Shipments of PCs in the first quarter fell by 13.9% from the same quarter in 2012. The forecast decline had been 7.7%, according to International Data Corp.'s Worldwide Quarterly PC Tracker. That makes the worst quarter ever tracked by IDC, which started issuing the reports in 1994.

Mini Notebooks saw the biggest decline on the low end, but the whole market was affected by what IDC calls "weak reception for Windows 8," Microsoft's (MSFT) answer to the rise of the tablet. The operating system that incorporates elements of tablet OS's "not only failed to provide a positive boost to the PC market but appears to have slowed the market," said IDC's Bob O'Donnell, in a statement. He said Windows 8 is just too radical a departure from what consumers have come to expect from Windows, and too expensive. The OS has "made PCs a less attractive alternative to dedicated tablets and other competitive devices."

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The numbers tell the tale. Hewlett-Packard (HPQ) still leads the market, but its worldwide shipments fell by a breathtaking 23% from the first quarter of 2012. U.S. shipments fell by about the same rate. Dell (DELL) saw declines of 10% globally and 14% in the United States. About the only "good" news came from Lenovo (LNVGY), where worldwide shipments remained flat, though growth in the U.S. was in the double digits.

The difference for Lenovo, says Ars Technica's Andrew Cunningham, is that consumers believe it to be a solid and reliable supplier of quality PCs, while HP and Dell are both struggling. Dell is in the midst of a restructuring that will take the company private and make it more of a services firm than a hardware company -- similar to what IBM (IBM) did, culminating in the 2005 sale of its PC business to Lenovo. "Consumers and businesses are going to notice and respond when your company acts like it might pull out of the PC market," Cunningham concludes. And Lenovo isn't acting that way.

Still, with the overall market falling at such a rate, it seems clear that PCs are becoming mainly office-only devices now that people can meet most of their personal-computing needs -- like interacting with people, reading news stories, and watching videos -- on tablets and phones.

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