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The message from Dell and Lenovo last week at the World Economic Forum was the same: The PC business isn’t going anywhere.
CEO Michael Dell and Gerry Smith, president of Lenovo Americas, said in separate interviews on CNBC’s Squawk Box that despite several years of declining sales of PCs worldwide, the market is stabilizing and the future of the systems is strong.
Michael Dell noted that his namesake company, which in 2013 went private, has had eight consecutive quarters of PC market share growth, and that the company “did gain more share than the other top two competitors [Lenovo and Hewlett-Packard] both worldwide and in the United States.”
For his part, Smith pointed to the growing number of form factors—such as two-in-ones and all-in-ones—as examples of ways PC makers are building systems that are addressing the demands of business users and consumers.
“Just like the car industry, where you have customization, the PC industry does that as well,” he said.
Despite the sales declines since 2011, PCs are still a $200 billion market in which 300 million units are shipped every year, Smith said.
PC sales started to decline after 2011 in large part because of the growing popularity of tablets. However, over 2014, the market stabilized as tablet shipments slowed, businesses began refreshing their older systems, new form factors came out and Microsoft stopped supporting Windows XP, forcing users to move to new operating systems.
IDC and Gartner analysts have said that the stabilization of the market continued in the fourth quarter, with shipments either slightly up or slightly down, though significantly better than the steep declines in 2012 and 2013.
Lenovo’s Smith said he expects the market to continue to either remain flat or increase. “The tablet market was supposed to be the demise of the PC, as earlier it was the netbook,” he said. “But tablet sales have really slowed down.”
Smith envisions a market where tablets and smartphones will be used for content viewing, and PCs for content creation.
“All three devices will have a life in the future, and I can see more and more people going back to PCs as the main device and use their smartphone as the other [device],” Smith said.
Michael Dell said the business refresh of older systems will be a key driver in the future, adding that there are 1.8 billion PCs in the world, and that about 35 percent of those are 4 years old or older.
“What happens is every so often we come out with a new one that’s interesting enough that the customer says, ‘I’ve got to have that one,'” Dell said.
Both Dell and Lenovo used the recent 2015 International Consumer Electronics Show (CES) earlier this month to launch a number of new systems. For Dell, that included the XPS 13, a small, lightweight system that is powered by Intel’s latest 14-nanometer 5th Generation Core processors and the chip maker’s RealSense 3D camera technology.
Patrick Moorhead, principal analyst with Moor Insights and Strategy, said in a column on Forbes.com that the “XPS 13 is without a doubt one of the most innovative products to come out of Dell in recent memory and it offers a glimpse into what the ‘New Dell’ has been up to over the past year since they’ve gone private and their 2013 strategy change.”
The new systems reinforced the message Michael Dell had been sending out over the past couple of years: The PC, despite market troubles, would continue to be a central part of the company’s larger strategy of becoming a top enterprise IT solutions provider.
Lenovo, the world’s top PC maker, also unveiled new systems, including PCs developed with NEC Personal Computers and additions to its lineup of ThinkPad Yoga convertible systems for both consumers and business users.
Dell and Lenovo weren’t the only vendors to show off new PCs. Hewlett-Packard, the number-two PC manufacturer, came to CES with a range of new systems, including the Pavilion Mini Desktop and Stream Mini Desktop, computers that are small enough to fit in the palm of the hand. Two months earlier, HP introduced Sprout, the upcoming desktop PC that includes an integrated scanner, projector, 3D printer and a touch-screen. Days later, in November 2014, Dell unveiled a similar system, called a “smart desk.”
For its part, Acer continues to expand its Chromebook portfolio, launching a 15.6-inch model at CES and two new systems for the education industry last week.