HP Leads In The Declining Global PC Market: Research

by CXOtoday News Desk    Jan 12, 2018

PC Market

The last few years have registered low PC shipments affecting several stakeholders, including the component manufacturer and the OEMs among others. It has thus changed the way how decision makers perceive and invest in the once-booming market which is now in the doldrums. Even though the market is seeing traction in few pockets, the growth of this market is pretty vague in the near future.

Worldwide PC shipments totaled 71.6 million units in the fourth quarter of 2017, a two percent decline from the fourth quarter of 2016, according to preliminary results by Gartner. The research firm showed that HP has led the PC market in 2017, followed closely by Lenovo, and Dell bringing up the rear.

For the year, 2017 PC shipments surpassed 262.5 million units, a 2.8 percent decline from 2016. It was the 13th consecutive quarter of declining global PC shipments, as well as the sixth year of annual declines. However, Gartner analysts said there were some signs for optimism.

“In the fourth quarter of 2017, there was PC shipment growth in Asia/Pacific, Japan and Latin America. There was only a moderate shipment decline in EMEA,” said Mikako Kitagawa, principal analyst at Gartner. “However, the U.S. market saw a steep decline, which offset the generally positive results in other regions.

“The fourth quarter results confirmed again that PCs are no longer popular holiday gift items. This does not mean that PCs will disappear from households,” Kitagawa said. “Rather, the PC will become a more specialized, purpose-driven device. PC buyers will look for quality and functionality rather than looking for the lowest price, which will increase PC average selling prices (ASPs) and improve profitability in the long run. However, until this point is reached, the market will have to go through the shrinking phase caused by fewer PC users.”

HP Inc. moved into the No. 1 position in the fourth quarter of 2017, as its shipments grew 6.6 percent, and its market share totaled 22.5 percent. The company showed year-over-year growth in all regions, including the challenging U.S. market. For the fourth consecutive quarter, Lenovo experienced a decline in shipments. Lenovo had moderate growth in EMEA and Asia/Pacific, but shipments declined in North America.

Dell’s shipments grew slightly in the fourth quarter of 2017. Dell did well in EMEA, Asia/Pacific and Latin America, but it had weak results in North America. Generally, Dell has put a higher priority on profitability over market share.

The Asia/Pacific PC market totaled 25 million units in the fourth quarter of 2017, a 0.6 percent increase from the fourth quarter of 2016. The consumer market stabilized with fourth-quarter online promotions in many countries, which drove demand for gaming PCs and thin and light notebooks. China experienced its first positive PC shipment growth since the first quarter of 2012. The success of the 11.11 shopping festival and the continuing demand for PCs in the commercial market drove the China PC market to 1.1 percent growth in the quarter.

PC Market Consolidation in 2017

For the year 2017, worldwide PC shipments totaled 262.5 million units in 2017, a 2.8 percent decrease from 2016. As the PC industry continues to consolidate, the top four vendors in 2017 accounted for 64 percent of global PC shipments. In 2011, the top four vendors accounted for 45 percent of PC shipments.

“The top vendors have taken advantage of their volume operations to lower production costs, pushing small to midsize vendors out of the market,” Kitagawa said.

Meanwhile another report by IDC estimated worldwide PC shipments inched upwards 0.7 percent to 70.6 million units in the fourth quarter. The top six vendors in IDC’s results were HP, Lenovo, Dell, Apple, Asus, and Acer. IDC agrees with Gartner with the trajectory of all five companies, except for Lenovo, which it estimates was flat. The rest of the market was down 2.2 percent. 

IDC too found that the PC market only shrunk 0.2 percent to 259.5 million units, but it cautioned that a return to growth won’t be easy.

“The fourth quarter results showed some potentially encouraging headway against the difficult environment in retail and consumer PCs,” IDC research manager Jay Chou said in a statement. “Enticed by a growing array of products that promise all-day battery life, high portability, and address emerging use cases that require more compute power, pockets of the consumer base are taking a serious look at these revamped PCs. However, the overall PC market remains a challenging one.”