PC markets slump in third quarter

Lenovo draws equal with HP at top of market

Tags: HPIDC Middle East and AfricaLenovo Group
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PC markets slump in third quarter Lenovo is establishing deeper roots in major markets says Yang.
By  Mark Sutton Published  October 11, 2012

Worldwide PC markets dropped sharply in Q3 2012, with shipments falling by 8.6% from the same quarter last year, according to figures from IDC.

The analyst company said that the figures were worse than expected, missing its estimate of a 3.8% fall, and marked a decline in PC shipment volumes worldwide. Ongoing economic depression, competition from other form factors such as tablet PCs and a lull in sales before the launch of Windows 8 all contributed to the worse than expected market.

"PCs are going through a severe slump," said Jay Chou, senior research analyst, Worldwide PC Tracker. "The industry had already weathered a rough second quarter, and now the third quarter was even worse. A weak global economy as well as questions about PC market saturation and delayed replacement cycles are certainly a factor, but the hard question of what is the ‘it' product for PCs remain unanswered. While Ultrabook prices have come down a little, there are still some significant challenges that will greet Windows 8 in the coming quarter."

"We expected a weak PC market in the lead up to Windows 8 release in the fourth quarter. While the industry has been focused on shaving excess inventory and preparing to launch a new generation of products, consumers have been looking at alternative devices like tablets. In addition, businesses have slowed their refresh cycle as they remain concerned about the broad economic outlook, amid a busy political season," said David Daoud, research director, Personal Computing at IDC. "Nevertheless, as vendors line up innovative new products and designs, consumers are likely to respond positively during the tail-end of 4Q12, and that means a potential return to positive growth at the end of this year."

The situation was mirrored in the EMEA region, with low levels of sell in in July and August as vendors trimmed inventory ahead of Windows 8.

The IDC figures were welcomed by PC vendor Lenovo however, as it drew almost level with HP for market leadership the first time. . HP shipped an estimated 13.9 million PCs in the quarter, representing 15.9% market share, while Lenovo shipped 13,824 million, or 15.7% of the total market. Quarterly figures from Gartner also give Lenovo 15.7% market share, by show HP with 0.2% less of the market than Lenovo, owing to differences in the inclusion of workstations in the figures.

HP saw shipment volumes fall 16% from the same quarter last year, while Lenovo the showed highest yearly growth, up 10%, despite slow down in Asia markets. IDC attributed Lenovo's progress to a steady build out of its channel and acquisition of OEMs in key markets, to expand its reach into new markets.

Lenovo Chairman and CEO Yuanqing Yang said in a statement: "Analyst figures released today reaffirm that Lenovo has continued momentum in the marketplace and that our formula for success - a clear strategy, innovative products, great execution and a strong, diverse global team - continues to work. We know the PC market is highly competitive, but also firmly believe there is room for continued profitable growth in this space.

"Becoming the clear leader in global PC share of course remains one of Lenovo's aspirations, but it also only represents one more milestone in our journey as a company and our mission to become the leader in the PC+ era. This includes PCs, tablets, smart phone, smart TV, cloud and enterprise computing. Our goal is to make Lenovo not only a leading PC+ brand, but also one of the most respected companies in the world.

"We are setting our sights on delivering long term, profitable growth, while leading the way forward into the PC+ era. To achieve this, we have a clear strategy and we are step by step building a company that is both globally connected and fully localized. We are establishing even deeper roots in each major market around the world. In addition to localized sales and distribution teams in major markets, we are establishing an even stronger manufacturing footprint; investing in R&D; and ensuring that top local talents are in place to build a strong competitive advantage and a winning business. This global reach with local excellence sees us creating a "global local" company and positions us to more deeply implement our Protect and Attack strategy, the foundation for our long term success," he added.

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