PC Shipments Stunted Ahead of Windows 8 Launch while Consumers Remain Distracted by Alternative Devices

Kuala Lumpur, 23 Nov 2012 – According to IDC's Asia/Pacific Quarterly PC Tracker, third quarter 2012 shipments of PCs in Malaysia dropped sharply compared to the second quarter – down to 634,000 units which is a decline of 29%. Despite support and end user incentives from principal multinational corporations, channels were still stuck with high levels of ageing inventory due to continuously sluggish demand by end users.

The weak U.S. and Eurozone economies also effectively dampened the sentiment of consumers.  This was further compounded by the lack of an IT investment focus in the government’s 2013 budget plus a dip in domestic GDP growth. Consumers themselves de-prioritized PC purchasing in favour of smartphones and tablets.

According to Ng Juan Jin, Market Analyst for Client Devices at IDC Asia/Pacific, "It was yet another slow quarter for ultrabooks in Malaysia which only managed a 5% share of total portables in 3Q12. The much touted form factor has yet to strike a chord amongst local consumers due to the lack of knowledge about benefits as well as apprehension over relatively high price points. However, with the launch of Windows 8 and its new touch functionality in 4Q12, it is possible that end users may be able to justify paying a premium for a new user experience on ultra slim PCs over tablets."

The sharp drop in PC shipments was also partially attributed to the absence of third quarter shipments for the Malaysian Communications and Multimedia Commission’s (MCMC) mini notebook project compared to 190,000 units in 2Q12.  This contributed to a 4% quarter-to-quarter decline in total commercial shipments.

Juan Jin adds, "Increased public sector spending was the saving grace of the overall commercial segment. Deployments to the Ministries of Education and Higher Education central contracts began this quarter and should continue well into 4Q12. However, given the gloomy economic conditions locally and worldwide, large enterprises and SMEs were discouraged from prematurely initiating PC refreshment cycles."

IDC has increased its Q4 PC forecast to reflect a 24% sequential growth on the confirmation of a 100,000 mini notebook commitment under Phase 4a of the MCMC initiative but IDC does not otherwise expect much improvement in PC shipments, even though channels were observed to be holding back on bringing in new shipments as they prepared for the launch of Windows 8 in October.

Daniel Pang, ASEAN Research Manager, Client Devices at IDC Asia/Pacific commented, “Although the launch of Windows 8 is an exciting development in the PC industry, demand for the OS may only be noticeable at the start of 2013 for the consumer market. Vendors did not end up bringing in many Windows 8 PCs prior to the launch date, resulting in a weak month of October in terms of ship-in volume. End users may also prefer to adopt a wait-and-see approach to gauge the initial reception of Windows 8 before committing themselves to investing in a new PC."