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How the PC Market’s Consistent Decline Affects Microsoft

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The 14th straight quarter of decline in the PC market

Earlier, we discussed market expectations from Microsoft’s (MSFT) soon-to-be-announced fiscal 3Q18 results. 

According to Gartner, PC (personal computer) shipments in 1Q18 fell 1.4% on a YoY (year-over-year) basis to 61.7 million units. 1Q18 marked the 14th consecutive quarterly fall—the lengthiest duration of decline in the PC market’s history.

According to Mikako Kitagawa, principal analyst at Gartner, “The major contributor to the decline came from China, where unit shipments declined 5.7 percent year over year.” She added, “This was driven by China’s business market, where some state-owned and large enterprises postponed new purchases or upgrades, awaiting new policies and officials’ reassignments after the session of the National People’s Congress in early March.”

It’s this flat shipment growth in the Asia-Pacific region—particularly in China (FXI)—that resulted in the fall. Moreover, the wait for Intel’s (INTC) new eighth-generation core processors also contributed to the fall as players kept a guarded outlook on overstocking.

This persistent sluggishness in the PC market has affected Microsoft’s Windows operating system and urged the company to announce its reorganization.

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Top players in the PC market

In 1Q18, Hewlett-Packard (HPQ), Lenovo (LNVGY), and Dell accounted for 56.9% of global PC shipments compared to 54.5% of global shipments in 1Q17. Dell experienced the strongest growth rate globally, with its shipments rising 6.5%.

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