Skip to main content

This article originally appeared on Real Money on Oct. 11 , 2016.

Third-quarter PC sales figures don't do anything to challenge the widely-held view that the industry is in a long-term decline. But they do give some reasons to think the decline is moderating, as corporate upgrades and the allure of quality consumer notebooks provide a measure of stabilization.

Research firm IDC estimates global PC shipments fell 3.9% annually in the third quarter to 68 million. That's improved from the second quarter's 4.5% drop and the first quarter's 11.5%, and better than the firm's prior forecast for a 7.1% drop.

Fellow research firm Gartner estimates PC shipments fell 5.7% to 68.9 million. That's the eighth straight quarter for which Gartner has estimated a decline, and a slightly bigger drop than the 5.2% it projected for the second quarter, albeit better than the 9.6% drop estimated for the first quarter.

There's a good chance the discrepancy between IDC and Gartner's growth estimates is partly due to the fact that IDC counts sales of Chromebooks, which run Alphabet (GOOGL) - Get Alphabet Inc. Class A Report subsidiary Google's Chrome OS, in its estimates, while Gartner doesn't. IDC notes Chromebooks "had another banner quarter" in the U.S. K-12 PC market. On the other hand, Gartner counts sales of Windows tablets such as Microsoft's (MSFT) - Get Microsoft Corporation ReportSurface line, while IDC doesn't.

Aside from narrower declines relative to late 2015 and early 2016, one key silver lining here is that developed markets, where PC penetration rates are higher and the impact of smartphone and tablet-buying on PC spending arrived earlier, are faring relatively well. IDC thinks U.S. PC shipments rose 1.7% to 17.6 million; Gartner thinks they fell 0.3% to 16.2 million. IDC also notes Japanese shipments rose.

PC sales within developed markets also tend to carry higher average selling prices (ASPs), which means they're more likely to contain costlier Intel (INTC) - Get Intel Corporation ReportCPUs, or a discrete graphics card sporting an Nvidia (NVDA) - Get NVIDIA Corporation Reportor AMD (AMD) - Get Advanced Micro Devices, Inc. Report GPU. They also carry lower operating system piracy rates, which results in Microsoft getting a disproportionate amount of its Windows licensing revenue from them.

TheStreet Recommends

Alphabet is a holding in Jim Cramer'sAction Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells GOOGL? Learn more now.

In addition to Chromebook sales, growing consumer interest in developed markets for thin-and-light notebooks sporting solid-state drives (SSDs) and providing long battery life seems to be helping out. Rising business PC upgrade rates and demand for PC/tablet hybrids sporting touch screens -- they're often referred to as convertibles -- are also playing roles.

Another notable industry trend: The largest PC makers continue grabbing share, aided by their brand power, superior economies of scale and investments in developing sleeker products. IDC estimates top-5 PC vendors had a combined 72.6% market share, up from 69.6% a year ago.

Lenovo was still the world's top PC maker, with IDC assigning it a 21.3% shipment share. But HP Inc. (HPQ) - Get HP Inc. Reportwas close behind with a 21.2% share. Dell was No. 3 at 15.8%, Apple (AAPL) - Get Apple Inc. Report No. 4 at 7.4% and Asus No. 5 at 6.9%.

Apple's shipment share was down from 8.1% a year ago ahead of an expected MacBook refresh. Given the company's Mac ASP is still north of $1,200 (far above the ASPs of other big PC makers), Apple's revenue share might be closer to 15%.

Altogether, IDC and Gartner's numbers are nothing to write home about. But they do arguably go against the narrative that the PC industry is in free fall, rather than merely declining, and give reasons to think the PC-related third-quarter sales numbers that industry firms are set to report in the coming weeks will be a little better than expected.

Intel's third-quarter report, due on Oct. 18, should provide additional color on where the industry stands going into the holiday season.