China’s Lenovo still world No 1 despite declining global market for personal computers

Analysts say company claimed a record-high share of worldwide market in Q4; industry expected to start bouncing back in second half of this year

PUBLISHED : Wednesday, 13 January, 2016, 7:40pm
UPDATED : Wednesday, 13 January, 2016, 7:47pm

Lenovo Group last year continued to extend its lead in the declining global personal computer market, which is forecast to post a modest recovery by the second half of 2016.

Separate preliminary estimates released Wednesday by research firms IDC and Gartner showed that the Chinese technology giant maintained its top rank and recorded an average 20 per cent market share for the whole of 2015, mostly due to strong personal computer shipments to North America.

“Our consistency in leading the market for 11 successive quarters proves there is ample room for growth in a consolidating market,” said Gianfranco Lanci, Lenovo’s president and chief operating officer, in a statement to the South China Morning Post.

That growth was in stark contrast to the overall state of the personal computer industry, which recorded total worldwide shipments below 300 million units for the first time since 2008.

IDC estimated that global shipments last year reached 276.216 million units, while Gartner calculated the total to be 288.735 million.

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Apart from longer product use and competition from smartphones and tablets, the industry has been negatively affected by economic issues like falling commodity prices, weak international currencies and social disruptions that roiled markets around the world.

“The economic environment weakened further with the recent drop in the Chinese stock market,” said Loren Loverde, a vice-president at IDC’s worldwide personal computer tracker group.

Mikako Kitagawa, a principal analyst at Gartner, said the industry was in the middle of structural change, which will see the installed base of personal computers reduced in the next few years.

Both analysts predict sales will recover in the second half of this year.

Meanwhile, Lenovo, which operates in more than 160 countries, achieved a record-high global market share of 21.4 per cent in the fourth quarter, according to IDC.

It estimated the Hong Kong-listed company’s total shipments during that period were down 4.5 per cent to 15.394 million units from 16.125 million a year earlier.

Gartner saw Lenovo having a 20.3 per cent market share in the fourth quarter on shipments of 15.384 million units, down 4.2 per cent from 16.061 million in the same period last year. It added that Lenovo declined less than the industry average last quarter.

“Fueled by new personal computer product lines, such as the ThinkPad X1 and Lenovo Yoga, we are confident in driving further share gains in the coming quarters,” Lanci said.

The solid year-end showing by Lenovo followed a sweeping corporate restructuring that it initiated in the third quarter, when it laid off 3,200 employees and wrote off US$300 million of its smartphone inventory.

Hewlett-Packard, the closest competitor of Lenovo among the world’s top-five personal computer suppliers, saw its total shipments in the same quarter decline 10.1 per cent by IDC’s estimates and 8.1 per cent by Gartner’s calculation.

Both IDC and Gartner said Apple emerged as a strong top-five personal computer supplier last year. The popular iPhone maker was ranked fourth for the whole year by IDC and fifth by Gartner.