Lenovo retains PC market lead as global shipments continue to decline

Computer giant is weighed down by slow growth in China, but eyes advantages from further industry consolidation

PUBLISHED : Wednesday, 12 October, 2016, 12:02pm
UPDATED : Wednesday, 12 October, 2016, 11:00pm

Slowed down by lethargic demand in China, Lenovo Group barely held on to its spot as the world’s top personal computer supplier in the three months to September amid the industry’s eighth consecutive quarterly decline in global shipments.

Preliminary data published early on Wednesday by technology research firms IDC and Gartner showed Lenovo maintained a slight edge over HP in the third quarter when worldwide personal computer shipment volumes reached about 68 million units.

IDC estimated a 3.9 per cent year on year global decrease in shipments to 67.99 million units, while Gartner calculated a 5.7 per cent drop to 68.94 million.

“There are two fundamental issues that have impacted PC market results: the extension of the lifetime of the PC caused by the excess of consumer devices, and weak PC consumer demand in emerging markets,” Gartner principal analyst Mikako Kitagawa said.

“Consumers in emerging markets primarily use smartphones or phablets for their computing needs, and they don’t find the need to use a PC as much as consumers in mature markets.”

There are two fundamental issues that have impacted PC market results: the extension of the lifetime of the PC caused by the excess of consumer devices, and weak PC consumer demand in emerging market
Mikako Kitagawa, Gartner principal analyst Mikako Kitagawa

Gartner estimated that shipments in mainland China, the world’s largest personal computer market, fell 4.8 per cent year on year in the third quarter. Shipments in the market slumped 6.4 per cent in the second quarter.

Data from IDC showed Lenovo shipped 14.51 million units worldwide in the third quarter, down 3.2 per cent from a year ago, for a 21.3 per cent global market share.

That marked the sixth consecutive year-on-year decline in global personal computer shipments for Lenovo, IDC said.

According to Gartner, Lenovo recorded a 2.4 per cent year-on-year slide in worldwide shipments in the same quarter to 14.43 million units for a 21.3 per cent market share.

Personal computer and printer maker HP, one of the two corporate successors to the old Hewlett-Packard, cornered a 20.9 per cent market share in the third quarter by IDC’s estimates. Gartner said HP had a 21.2 per cent share.

The race for market leadership between Lenovo and HP, as well as industry efforts to rebuild inventory for the second half of this year, could provide some improvements in personal computer demand over the next few quarters.

Loren Loverde, a vice-president at IDC, said those have set the stage for a stronger market going forward.

“Industry efforts to update products to leverage new processors and operating systems, to deliver a better computing experience encompassing more mobile, secure, and faster systems, and to accelerate PC replacements have been critical,” Loverde said.

Lenovo last week appeared poised to expand its operations in Japan, the world’s third-biggest information technology market, as Fujitsu considered divesting its personal computer business to the Chinese hi-tech giant. Speculation is rife that Fujitsu and Lenovo may reach a deal within this month.

That would mark the second acquisition for Lenovo in the personal computer industry this year, following its US$195 million purchase in July of a further 44 per cent interest in NEC Holdings, its joint venture with NEC Corp in Japan.

Lenovo chairman and chief executive Yang Yuanqing said in August that the company was focused “on high-growth segments and leveraging industry consolidation to resume growth” in its personal computer business.