Worldwide PC shipment hit 123.9 million units in Q2, representing year-on-year growth of 14 percent, according to Canalys. With no sequential growth, the positive effect that tablets have had on overall PC shipments is beginning to wear off.
Tablet shipment in Asia Pacific (including China) came in 8 percent below Q1 numbers, mainly due to a fall in shipment by Apple and Samsung.
Apple continued to lead the market with a 14 percent market share, though a 10 percent increase in Mac shipments could not make up for a decline in iPad sales, resulting in the company’s overall shipments declining by 5 percent.
Lenovo had another impressive quarter, with shipment up almost 20 percent year on year, boosting its share to just below 14 percent — some 780,000 units behind Apple. Rounding off the top four, both HP and Dell posted year-on-year increases in shipments, at 11 percent and 14 percent respectively, leading to sequential increases in market share.
Worldwide tablet shipments fell approximately 5 percent sequentially to 48.4 million units, as Apple and Samsung suffered shipment declines. Apple shipped just under 13.3 million iPads in its weakest quarter since Q1 2012. Samsung shipped just under 8.9 million tablets during the quarter, which represents a sequential decline, albeit not quite as sharp as Apple’s. Apple and Samsung continue to account for 46 percent of global tablet shipment, and as a result many markets hinge on their combined success.
“A slowdown in the pace of innovation is creating an issue for tablet vendors. The tablet market has quickly found itself in the same position the notebook market was in some years ago, with minimal increases in hardware performance forming the basis for an argument to upgrade,” said Tim Coulling, Senior Analyst of Canalys. “But when considering the most common tasks that tablets are asked to perform, the need for more horsepower is often not evident. Vendors will need to work harder to give reasons to upgrade if things are to improve in Q3. In addition, as smart phone screen sizes increase, the potential for such products to disrupt the market for 7-inch tablets is also increasing.”
“Pricing remains Apple’s biggest barrier to growth and essentially locks it out of a number of markets,” said Rushabh Doshi, Research Analyst of Canalys. ‘By holding firm on its prices, Apple ensures that its tablet business is highly profitable. But as sales in its key markets slow, it is betting on the improving economic environment in high-growth markets, such as China, to drive future growth.”
Samsung faces a different challenge: it is fighting battles on all fronts as it attempts to compete in a wide range of market segments.
“The release of the Galaxy Tab S line saw it add Super AMOLED screens to its tablet offerings as well as introduce a new 10.5-inch screen to its portfolio. With Samsung playing in so many segments, it is able to find pockets of demand. But it also drives obsolescence in other areas of its portfolio, causing inventory buildup that necessitates rounds of promotional activity,” said Doshi.
The notebook market enjoyed a resurgence in Q2, with shipment all but flat on the same quarter a year ago. With 49.1 million units shipped in the quarter, notebook shipment surpassed those of tablets for the first time since Q3 2013.
Chromebooks are gaining traction, with increasing demand from consumers and education, especially in the US. Intel’s Atom-based Bay Trail platform and the falling price of touch-screens are driving down the cost of consumer notebooks.
“It is a little premature to expect a large-scale refresh, but pricing has now reached a point that is starting to stimulate demand,” said Coulling. “Consumers can expect further price cuts in the second half of 2014 as Microsoft responds to the increasing threat from Google. It has dropped licensing costs on small form-factor tablets and announced ‘Windows with Bing’, which will provide Windows for free on low-cost notebooks. Falling prices are great for consumers but will do nothing to ease the pain for vendors, whose margins are under constant pressure.”