The PC market is declining, which is hardly an unfamiliar narrative – despite some signs of recovery in 2018 – but the latest twist is that Intel’s processor shortage is apparently contributing more and more to slumping computer sales. However, where Intel is losing ground, AMD is making gains (as we’ve seen in other recent reports – more on that later).

The two major analyst firms when it comes to PC sales, Gartner and IDC, have both observed a considerable drop in the latest quarter’s figures.

Gartner’s statistics show that global PC shipments for the first quarter of 2019 dropped by 4.6% year-on-year, settling at around 58.5 million units. IDC measured a slightly smaller impact with a 3% drop, albeit reaching the same figure of 58.5 million shipments as Gartner.

That said, IDC observed that even though a decline is hardly good news, the market did perform better than forecasted, in particular with stronger than anticipated desktop PC shipments, particularly on the commercial side (the overall PC figures take into account not just desktop computers, but also laptops and workstations).

The most interesting part of these reports, arguably, is highlighting Intel’s share of the blame when it comes to the PC market slump.

Gartner’s senior principal analyst, Mikako Kitagawa, said that Intel’s CPU supply shortage “affected the vendor competitive landscape as leading vendors had better allocation of chips and also began sourcing alternative CPUs from AMD.”

She further observed: “The top three vendors worldwide were still able to increase shipments despite the [CPU] supply constraint by focusing on their high-end products and taking share from small vendors that struggled to secure CPUs.”

IDC also contended that there’s been a shift in the PC market towards more premium (and business) products, and that the “shortage of Intel processors, mostly at the lower end, remained a factor in seeing a contraction in 1Q19”, but also that: “Furthermore, more PC brands turned to AMD chips.”

No surprise

Both analyst firms are echoing each other to quite a degree here, which is definitely interesting, but not really surprising given what else we’ve heard recently concerning the processor world.

Namely that Intel’s production problems and CPU shortages have led the firm to concentrate on higher-end processors, because this simply makes financial sense – if something’s got to give, it has to be the more affordable models, simply because there’s less profit margin. It’s damage limitation, in other words: if production volume is down, at least profits won’t be as far down.

And it’s common sense that if Intel can’t provide, then AMD will try to fill any gaps, and has been doing according to the most recent figures regarding CPU sales we’ve come across. These show that AMD’s Ryzen processors are now selling twice as fast as Intel’s chips, and have been doing for a while (Intel’s CPU production problems have been ongoing for some time).

That said, the light at the end of the tunnel is allegedly in sight for Intel, with the company previously claiming that these manufacturing woes will be resolved by the end of the second quarter (ie by the time June rolls around).

Via The Inquirer