Preliminary data from Gartner showed that worldwide PC shipments reached 61.1 million units in the second quarter of 2017, a 4.3% drop compared to the same period last year.

The PC industry is in the midst of a five-year slump, and this is the 11th straight quarter of declining shipments, according to the market research firm, noting that shipments in the second quarter of this year were the lowest quarter volume since 2007.

In the Asia Pacific region, PC shipments surpassed 21.5 million units in the second quarter of 2017, down 5.1% from the same period last year. The PC market in this region was primarily affected by market dynamics in India and China. In India, the pent up demand after the demonetisation cooled down after the first quarter, coupled with the absence of a large tender deal compared to a year ago and higher PC prices, brought about weak market growth.

The China market was hugely impacted by the rise in PC prices due to the component shortage that started in late 2016. 2Q17 saw inventory, especially in the consumer channel, brought over from the previous quarter. Further PC price adjustments had to be made to react to the component shortage in the quarter, and the deterioration of the yuan against the U.S. dollar also added to the challenge for foreign brands. Price hikes resulted in the postponement of PC purchases, especially by large accounts, impacting new shipments for the quarter overall. In mature markets, growth continued to be stable, driven by PC refresh, according to the market research firm.

“Higher PC prices due to the impact of component shortages for DRAM, solid state drives (SSDs) and LCD panels had a pronounced negative impact on PC demand in the second quarter of 2017,” said Mikako Kitagawa, principal analyst at Gartner. “The approach to higher component costs varied by vendor. Some decided to absorb the component price hike without raising the final price of their devices, while other vendors transferred the costs to the end-user price.”

However, vendors could not increase the price too quickly, especially in large enterprises where the price is locked in based on the contract, according to the analyst. Meanwhile in the consumer market, the price hike has a greater impact as buying habits are more sensitive to price increases since many consumers are willing to postpone their purchases until the price pressure eases.

HP, which has achieved five consecutive quarters of year-over-year growth, reclaimed the top position from Lenovo in the worldwide PC market in the second quarter of 2017. Shipments grew in most regions, and it did especially well in the U.S. market where its shipments growth far exceeded the regional average, according to Gartner.

Lenovo’s global shipments declined 8.4% in the second quarter of 2017, after two quarters of growth. Lenovo recorded year-over-year shipment declines in all key regions. Kitagawa said the 2Q17 results could reflect Lenovo’s strategic shift from unit share gains to margin protection. The strategic balance between share gain and profitability is a challenge for all PC vendors.

Dell, which has placed a high priority on PCs as a strategic business, achieved five consecutive quarters of year-on-year global shipment growth, as shipments increased 1.4% in 2Q17. Among the top three vendors, Dell is the only vendor which can supply the integrated IT needs to businesses under the Dell Technologies umbrella of companies.

The Chromebook market has been growing much faster than the overall PC market. Gartner does not include Chromebook shipments within the overall PC market, but it is moderately impacting the PC market. Worldwide Chromebook shipments grew 38% in 2016, while the overall PC market declined 6 percent.

“The Chromebook is not a PC replacement as of now, but it could be potentially transformed as a PC replacement if a few conditions are met going forward,” Kitagawa said. “For example, infrastructure of general connectivity needs to improve; mobile data connectivity needs to become more affordable; and it needs to have more offline capability.”