Lenovo shipments fall 2pc as industry slowdown persists

Chinese tech giant remains global leader with a 21.2pc market share, after selling 13.2 million PCs in the three months to June

PUBLISHED : Tuesday, 12 July, 2016, 7:46pm
UPDATED : Tuesday, 12 July, 2016, 11:00pm

Chinese technology giant Lenovo Group saw its global personal computer shipments decline for the fifth consecutive quarter in the three months to June, as total industry demand remained weak in all geographic markets, except North America.

While Britain’s vote to exit from the European Union had no impact on worldwide personal computer sales last quarter, the repercussions from Brexit could potentially create uncertainty in overall technology spending beyond Europe, according to analysts at research firms IDC and Gartner.

Their latest preliminary market estimates released in the United States showed Lenovo posting a 2 per cent year on year decrease in shipments in the second quarter.

Lenovo still remained the industry leader with shipments of 13.2 million personal computers and a 21.2 per cent market share, according to IDC.

Gartner calculated virtually the same amount of shipments during the period, but pegged Lenovo’s global share at 20.5 per cent.

IDC estimated that overall personal computer shipments last quarter were down 4.5 per cent year on year to 62.4 million units, beating its previous forecast of negative 7.4 per cent on the back of healthy growth in the US.

“It’s not dramatic growth, but it could push the market into positive territory slightly ahead of our forecast for 2018,” IDC vice-president Loren Loverde said.

It’s not dramatic growth, but it could push the market into positive territory slightly ahead of our forecast for 2018
IDC vice-president Loren Loverde

According to Gartner, global personal computer shipments fell 5.2 per cent in the three months to June to 64.3 million units, marking the seventh consecutive quarter of decline for the industry.

Gartner analyst Mikako Kitagawa said the market showed some signs of improvement, which suggested less impact from foreign exchange fluctuations.

“One of the ongoing problems in the personal computer market has been the price hike in selected regions due to the weakening local currency against the US dollar,” Kitagawa said.

The economic fallout from Brexit, however, prompted No 3 personal computer supplier Dell last week to push for a 10 per cent across-the-board increase on its products in Britain amid the weakening pound.

Both Lenovo and close rival HP have said they were closely monitoring the situation before making any decision to adjust their product prices.

Yang Yuanqing, the chairman and chief executive at Lenovo, said last week that he expected Brexit to “have limited impact” on the Hong Kong-listed computer maker.

He pointed out that Lenovo was “very experienced in dealing with this kind of situation” after going through the large currency fluctuations in Brazil and its other markets in South America during the past couple of years.

“We’re working to keep the PC business as our cash cow,” Yang said.

“I believe more players will leave the PC industry, so we will take advantage of this consolidation.”

According to Gartner, slow upgrades to Microsoft’s Windows 10 system has also contributed to lacklustre personal computer sales as more consumers are willing to use older hardware.