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Lenovo and HP Inc. continue to vie for the top spot in a global PC market that continues to slow and that is consolidating around a handful of top vendors.
Third-quarter numbers released this week by market research firms IDC and Gartner showed that HP is inching closer to market leader Lenovo, with less than a percentage point separating them in the number of systems shipped.
The two analyst firms also said that shipments worldwide continued their decline in the third quarter, driven in large part by the continued demand for other mobile computing devices—particularly smartphones and phablets—and PC users holding onto their systems longer rather than buying new ones. While there is some optimism that new form factors—such as two-in-ones and convertibles—may offer the PC market a reprieve in the near future, the effort to convince more business users and consumers to buy new systems will continue to be a tough slog.
“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,” Mikako Kitagawa, principal analyst at Gartner, said in a statement. “According to our 2016 personal technology survey, the majority of consumers own, and use, at least three different types of devices in mature markets. Among these devices, the PC is not a high priority device for the majority of consumers, so they do not feel the need to upgrade their PCs as often as they used to. Some may never decide to upgrade to a PC again.”
The PC space in emerging markets is not nearly as saturated, but consumers in those countries see smartphones and phablets as their primary computing devices, and they aren’t likely to turn to PCs, Kitagawa said.
In a lot of ways, the third quarter mirrors what has occurred in the market for several years, with shipments declining and PC and component makers working hard to develop new products that will turn consumer and businesses users’ attention—and tech dollars—back to client systems. IDC analysts seemed more optimistic about the market, despite the shipment declines.
“We are very pleased to see some improvement in the market,” Loren Loverde, vice president of IDC’s Worldwide PC Trackers and Forecasting business, said in a statement. “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. These improvements are accumulating, and set the stage for a stronger market going forward.”
According to IDC analysts, third-quarter PC shipments hit almost 68 million units, a 3.9 percent decline over the same period last year. Despite the continued slowing shipments, they noted that the results were better than what was expected, and that PC makers are making strides to stabilize the market. OEMs are turning their attention more to building inventory for the second half of the year rather than reduce inventory of older systems, which they had been doing over the past year or more.
HP Closes In on Lenovo in a Consolidating Global PC Market
Gartner analysts said PC shipments reached 68.9 million units, a 5.7 percent decline, and added that there are several hurdles facing system makers, including weak back-to-school sales—traditionally an important season for the PC market—and continued low demand in the consumer market, particularly in emerging countries.
Both analyst firms also noted the ongoing consolidation in the market. According to IDC, the top three PC vendors—Lenovo, HP and Dell—accounted for 58 percent of the market in the third quarter, up from 55 percent last year and 51 percent in 2014. Gartner analysts said that the top six vendors—those three, plus Asus, Apple and Acer—combined for 78 percent of shipments in the quarter. The consolidation means that the top vendors can grow their advantage over smaller players through dominating both in the supply chain and on market shelves.
It’s a tight competition at the top. Lenovo in 2013 took over the number-one slot from then Hewlett-Packard (HP split in November 2015, creating PC and printer company HP Inc.). Gartner said Lenovo saw shipments decline for the sixth consecutive quarter, while both HP and Dell had shipments grow for the past two quarters.
In the third quarter, Lenovo shipped more than 14.4 million PCs, a 2.4 year-over-year decline, while HP shipped more than 14 million units for a 2.3 increase. Lenovo now has 20.9 percent of the market, while HP has 20.4 percent, Gartner said. It is an even tighter race, according to IDC’s numbers, where Lenovo owns 21.3 percent of the market and HP 21.2. Dell has 14.7 percent (Gartner) to 15.8 percent (IDC).