PERSONAL COMPUTERS

Lenovo

Lenovo reverses PC shipment decline to retain No 1 spot for global sales

The Chinese technology giant held a 21.3 per cent share of the global market in 2016, just ahead of rival HP on 20.9 per cent

PUBLISHED : Thursday, 12 January, 2017, 4:37pm
UPDATED : Wednesday, 18 January, 2017, 8:40am

Lenovo Group ended six consecutive quarters of declining shipments to retain its spot as the world’s largest personal computer supplier last year, despite sliding global sales across the industry.

Hong Kong-listed Lenovo saw its personal computer shipments increase slightly in the three months to December 31, driven by strong holiday sales in Europe and North America, according to preliminary data released on Thursday by technology research firms IDC and Gartner.

That enabled the Chinese technology giant to maintain its place at the top of the global personal computer market for a 15th straight quarter.

The broad personal computer market has been static as technology improvements have not been sufficient to drive real market growth
Mikako Kitagawa, principal analyst, Gartner

IDC estimated that Lenovo’s fourth-quarter shipments advanced 1.7 per cent to 15.693 million units, up from 15.434 million in the same period of 2015.

Total fourth-quarter shipments for the industry, meanwhile, were down 1.5 per cent year-on-year to 70.203 million units, it said.

“The fourth-quarter results reinforce our expectations for market stabilisation, and even some recovery,” IDC vice-president Loren Loverde said. “We have a good opportunity for traditional personal computer growth in commercial markets, while the consumer segment should also improve as it feels less pressure from slowing phone and tablet markets.”

Gartner calculated a 1.6 per cent rise in Lenovo’s sales in the fourth quarter to 15.781 million units from 15.535 million a year earlier.

It saw a 3.7 per cent year-on-year decrease in total industry shipments to 72.611 million units in the same period.

Mikako Kitagawa, a principal analyst at Gartner, said the business and gaming segments of the personal computer market may provide growth opportunities, but these will not prevent another year of sales declines for the industry.

“The broad personal computer market has been static as technology improvements have not been sufficient to drive real market growth,” Kitagawa said.

Lenovo, which operates in more than 160 countries, managed to stave off the challenge of close rival HP in the past 12 months, while the personal computer industry endured its fifth consecutive year of falling sales.

According to IDC, Lenovo recorded a 3 per cent year-on-year decrease in personal computer shipments to 55.502 million units in 2016 that was enough to give the company a 21.3 per cent share of the global market.

HP, by comparison, saw its personal computer shipments grow 1.3 per cent to 54.290 million units, for a 20.9 per cent share behind Lenovo.

Total industry shipments last year fell 5.7 per cent to 260.183 million units.

Huatai Research forecast in a report last week that Lenovo’s revenue for the 12 months to March would reach US$43 billion, down from US$44.9 billion in the same period a year earlier.

“A stronger US dollar and higher component costs are exerting pressure on personal computer margins, while [its] smartphone sales have slumped in emerging markets,” said Huatai analyst Ken Hui, who has a “Hold” rating on Lenovo shares.