The XP bubble has well and truly burst, leaving the UK channel awash with unwanted commercial PCs and vendors facing a costly write-down to clear a mountain of misery.
Microsoft ending support for the creaking operating system last April revived the industry in 2014, but it seems vendors forgot the sales cycle and that their products have a shelf life.
More ReadingHP Split: Naming the big dogs for new-look giantWanted: PC salesman to head up HP's UK channel opsAMD stops shipping chips as bloated channel begs 'Please, no more'Death knell for Windows with Bing, licences carved upWhy 1.6 million people will miss Microsoft's Windows Server 2003 date with fate
Distributors told El Chan that up to £50m of excess stock is lodged in warehouses, with all of the major players, including Lenovo, HP, Dell, Toshiba and Fujitsu blamed.
“The market was driven really hard last year,” said one, “but since November there was an awareness the channel was over-stocked. There’s been a correction in sales-out and now we are having tough conversations with vendors about resetting quotas."
Another agreed it took three months for PC makers to realise that boxes were being pushed out of the door more slowly, and “they were buying in for the XP bubble”.
“This is not toxic but needs a correction, vendors are acutely aware of this and we’ll see some aggressive sales out activity,” he added.
A third distie said vendors were “helping to clear any issues with deals”, adding “HP set itself a massive quota last quarter and missed by a mile”.
The XP factor notably made a mark from Q3 2013 and gave sales an uplift for much of last year, but both Intel and Microsoft noted recently the upgrade trend was all but over.
We asked the PC makers for comment last Friday and some were more forthcoming than others.
Dell told us it had seen “solid growth” in the PC client biz “during the last several quarters” but refused to comment on current inventory.
“We don’t discuss specific results within our business or make projections regarding pricing or future results,” a spokeswoman stated.
Lenovo said “sadly at this point there is nothing we can share”.
We are still awaiting comment from the others.
Since publication, HP has refused to comment. ®