With Gartner warning that PC shipments declined 1.4 percent overall in the fourth quarter of 2012, Microsoft took the rare step of publicly stating that that estimate might in fact be a bit conservative. But both firms agree on one thing: Although some of the downturn is related to consumer worries due to economic conditions, part of the blame also belongs to a 2011 flood in Thailand that triggered hard drive shortages. And it could get worse before it gets better.
According to Gartner, PC makers sold more than 92.2 million PCs worldwide in the fourth quarter of 2011, 1.4 percent fewer than in the same quarter one year before. (Rival analyst firm IDC has yet to release its own figures, which are generally in line with Gartner's. But IDC previously revised its estimates for the quarter to suggest that sales would slow by about 1 percent.)
"Hard-disk drive shortages triggered by the October 2011 floods in Thailand had a limited impact on fourth-quarter PC shipments and prices," Gartner noted. "A major impact will be felt, and this is expected to materialize in the first half of 2012, and potentially continue throughout 2012. These shortages will temporarily lower PC shipment growth during 2012."
Microsoft Chief Financial Officer and Chief Marketing Officer Tami Reller isn't even that sanguine. At an investor's conference this week after an appearance at Microsoft's last CES keynote address, she said that Gartner's estimates were off and that PC sales were "probably lower."
Microsoft General Manager of Investor Relations Bill Koefoed echoed those comments at a separate event. He said that, "as the numbers come out, you'll likely see that number decline further as the impact has been felt faster than people had anticipated. The supply chain is recovering faster than expected, but it has had an impact on the PC market."
Thailand's floods were damaging to the PC industry because a huge percentage of hard drives are made in that country. Some factories there weren't operational for weeks, leading to shortages in storage hardware.
Microsoft will report its quarterly earnings for Q4 2011 (its fiscal 2012 second quarter) next week, on January 19. I take its multiple warnings this week to suggest that revenues in the Windows division—currently busy prepping its next major product, Windows 8—will be lower than originally expected.
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