The global PC market declined by 3.7% in Q4 2018, according to preliminary results from IDC.
The analyst company said that across desktop, notebook and workstations, just over 68.1m units shipped in the quarter, marking a year-on-year decline, but slightly ahead of forecast of a 4.7% decline.
It is the largest year-on-year decline since the third quarter of 2016 (3Q16) and capped the full year at a nearly flat rate of -0.4%.
Heading into the quarter there was industry-wide concern over processor shortages and rising economic tensions between the US and China, IDC said. Aggressive stocking of inventory during the previous quarter (3Q18) in anticipation of the shortage led to some sell-through challenges, driving a reduction of Q4 shipments in some regions. The fourth quarter is typically oriented toward consumer promotions that help drive the industry's biggest quarter of the year, but the confluence of events in 2018 led to the lowest sequential growth for a holiday quarter since the fourth quarter of 2012.
Nonetheless, the market performed better than expected, with corporate PC refresh - driven by the looming Windows 7 end of life (EOL) in January 2020 - helping to offset consumer market challenges. Japan had an especially strong quarter driven by commercial refresh, which lifted virtually all aspects of the market. All regions except the US exceeded the forecast, although Asia/Pacific (excluding Japan) faced challenges from a difficult Chinese commercial environment.
"The ongoing economic tensions between China and the United States continue to create a lot of uncertainty in the business environment in China. As demand for Chinese products in the US drops, this particularly impacts businesses of all sizes from the manufacturing sector in China, which, in turn, translates to a drop in IT purchases by these companies," said Maciek Gornicki, research manager with IDC's Asia/Pacific Client Devices Group. "As a result, the PC market in China is expected to suffer bigger declines throughout the year. And if the trade war escalates further, we should expect spillover of the impact to other countries, particularly due to the expected fluctuations of the exchange rates impacting businesses across the region."
"As the U.S. PC market, especially the lower-end, continued to suffer from the ongoing shortfall of Intel CPUs, overall PC sales took a hit during the fourth quarter of 2018," said Neha Mahajan, senior research analyst with IDC's Devices and Displays Group. "While the processor supply challenges are expected to continue into the first two quarters of 2019, PC makers are likely to see the situation improve before the back-to-school season begins during the latter half of the year."
In the EMEA market, IDC said that the fourth quarter showed negative growth for the first time in six quarters. The weakening of the market is due to ongoing ongoing component shortages, and was further impacted by a level of disruption and uncertainty arising from challenging geopolitical and economic scenarios within major economies in the region.