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Lenovo overtakes HP as world’s top PC vendor; global PC shipments decline

Lenovo is now the world’s top PC vendor, overtaking HP, according to two research firms.

Lenovo is now the world’s top PC vendor, overtaking HP, according to two research firms.

International Data Corp. reported that Lenovo reached 16.7% global PC market share in 2Q 2013, up from 15.0% in 2Q 2012, one year ago. Gartner stated Lenovo reached 16.7% share this quarter, up from 14.9% last quarter and the same 14.9% from 2Q 2012, one year ago.  This marks the first time that Lenovo has been the clear global leader in PCs according to both of these widely accepted reports.

In Lenovo’s fiscal year ended March 31, 2013, IDC said that Lenovo had achieved a record global PC market share, expanded faster than the overall PC market for the 16th consecutive quarter, led the market in three of the seven largest PC markets – China, Japan and Germany – and reached double digit share in 39 countries.

More than half of Lenovo’s revenue then comes from outside of China.  While delivering significant volume and revenue growth, the company’s profitability reached record heights with earnings up 34% last year.

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Further, Lenovo has accelerated its transformation to become a top competitor in the PC Plus era, capturing a 5.9 percent share of the global market for “Smart Connected Devices” and becoming the third largest supplier.  The company is the number 2 smartphone and number 2 tablet company in China, the world’s largest PC+ market.  Further, more than 10% of the company’s revenues now come from hot growth segments such as smartphones and tablets.

“The battle for PC leadership could certainly still go back and forth.  But I am fully confident that there remains substantial room for profitable growth and groundbreaking innovation in the global PC marketplace,” says Yang Yuanqing, Chairman & CEO, Lenovo. ““The PC market is changing, but it still represents a $200b opportunity.”

HP slipped to second place, but growth improved from recent quarters, according to IDC. The company received a strong boost from shipments to India as part of large education projects. Shipments continued to decline significantly in EMEA, although the company’s U.S. business stabilized a bit after a significant decline in the first quarter of 2013.

Gartner says that while HP was slightly behind Lenovo, HP is a market leader in key regions including the U.S., EMEA and Latin America. Asia/Pacific has been a weakness the last three years for HP, but preliminary second quarter results suggest an improvement of their performance in the region.

Despite ongoing uncertainty surrounding its restructuring, Dell performed above market with a decline of -4.5%. As with HP, this was a significant improvement from the past year that was aided by improving growth in the United States. The firm continued to seek opportunities at all levels of the pricing spectrum and managed to perform above market in all key regions except Asia/Pacific (excluding Japan).

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IDC says the Acer Group continued to see substantial declines in shipments across regions as the company was strongly impacted by weak consumer demand. Although it has been aggressive in expanding more premium offerings to offset falling mini notebook sales, Acer has been hampered by slow demand for pricier ultrabooks.

Meanwhile, ASUS shipments were constrained by inventory clearance challenges in key regions. Despite its focus on innovative designs, its relative weakness in the commercial space coupled with an intrinsically depressed consumer market led the vendor to see a decline of over 20%.
smartphones and tablets, according to IDC.

Global Shipments Decline

Worldwide PC shipments dropped to 76 million units in the second quarter of 2013, a 10.9 percent decrease from the same period last year, according to preliminary results by Gartner, Inc. This marks the fifth consecutive quarter of declining shipments, which is the longest duration of decline in the PC market’s history.

International Data Corporation (IDC) also released similar figures. Worldwide PC shipments totaled 75.6 million units in the second quarter of 2013 (2Q13), down -11.4% compared to the same quarter in 2012 but slightly better than expected, according to IDC’s Worldwide Quarterly PC Tracker.

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IDC says the numbers reflect a market that is still struggling with the transition to touch-based systems running Windows 8 as well as justifying Ultrabook prices in the face of economic pressures and competition from tablets and other devices.

“We are seeing the PC market reduction directly tied to the shrinking installed base of PCs, as inexpensive tablets displace the low-end machines used primarily for consumption in mature and developed markets,” said Mikako Kitagawa, principal analyst at Gartner. “In emerging markets, inexpensive tablets have become the first computing device for many people, who at best are deferring the purchase of a PC. This is also accounting for the collapse of the mini notebook market.”

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