WRAL Tech Wire

PC shipments fall 3%, less than expected, in 2Q; Lenovo grows

Lenovo remains fourth in PC sales.

Related Stories

• Dell: PC demand 'appears to have stabilized'
• Lenovo complies with China's demand for web filtering software
• China backpedals on filtering software order
• China defends telling Lenovo, other PC makers to install net filtering software
• Losses mount at Lenovo, but chairman says no more layoffs
• AT&T to sell Lenovo’s ‘netbooks’ as well as Dell, Acer rivals
• Take that, Acer, Lenovo - Dell launches its own 'netbooks'
• Lenovo cites construction woes as reasons for demise of Polish plant
• Lenovo cashes in on Australian school deal – 220,000 laptops
• New CEO says Lenovo's focus is 'long-term growth,' rules out more layoffs
• Lenovo to lay off additional 450 workers in China
• Another former IBM exec quits Lenovo, returns to Big Blue
• Former top marketing officer at Lenovo quits
• Hedging layoffs comment, Lenovo CEO says cost-cutting is 'ongoing process'

On The Web

• IDC
• Gartner
• HP
• Dell
• Acer
• Lenovo
• Toshiba
• Apple

Site Search

Worldwide personal computer shipments declined at a gentler pace than expected in the second quarter as consumers snapped up inexpensive laptops, two technology research groups said Wednesday.

In both reports, the global marketshare for Lenovo increased as did shipments through the first six months of the year. Lenovo, which has most of its operations in China but maintains its headquarters in Morrisville, N.C., increased shipments by 2.9 percent and upped its marketshare to 8.7 percent, according to IDC. Gartner, meanwhile, said lenovo business grew 3.2 percent and marketshare increased to 8.4 percent from 7.8 percent for the same time in 2008.

Still, the figures point to 2009 being the industry’s first full year in decline since 2001. And while those low prices have kept people shopping, the PC makers will pay the price in depressed earnings.

The overall market reports provide a little comfort for PC makers Lenovo, and Dell, which operates one of its largest manufacturing plants in Winston-Salem. Dell (Nasdaq: DELL) shares were hammered earlier this week when it reported a continuing weakness in sales. Dell did say that the PC market 'appears to have stabilized.'

IDC, a research group based in Framingham, Mass., said global PC shipments fell 3 percent in the second quarter, not the 6 percent its analysts had predicted.

A second group, Stamford, Conn.-based Gartner Inc., estimated shipments sank 5 percent, better than the nearly 10 percent decline expected.

IDC and Gartner results differ because the groups use different methods to track the industry.

"Lenovo's renewed focus on Notebooks and emerging regions produced positive growth following declines in the past two quarters.," IDC noted. "Solid growth was reported in Latin America and APeJ while yearly declines in mature regions slowed compared to 1Q09. Its home court advantage in APeJ also has led it to focus on a myriad of government stimulus programs, which could pay dividends while riding through the commercial downturn."

About Dell, IDC added: "Although still heavily affected by the commercial slump, Dell saw good growth from consumer-focused SKUs and reclaimed the number 1 spot in the U.S. The company continues to restructure operations, develop its Consumer business, and should benefit from an eventual rebound in the commercial segment."

Analysts were conservative in their interpretations of the results Wednesday. Mikako Kitagawa of Gartner called the numbers “a small sign of a PC market recovery in terms of shipment volumes in some regions.” Shipments in the U.S. and Asia beat expectations, but Europe, the Middle East and Africa remained weak, she said.

Despite strong results from chipmaker Intel Corp. this week, the researchers said they don’t expect the PC industry to dramatically turn around this year. Kitagawa said strong shipments to the U.S. and Asia could lead to minute growth for 2009. IDC currently expects shipments to fall 3 percent for the full year, but said the forecast could improve.

Hewlett-Packard Co. (NYSE: HP) remained the world’s largest PC maker with about 20 percent market share, according to both groups. Dell Inc. was still No. 2, with almost 14 percent market share, but only barely held onto its lead over Acer Inc. HP and Acer shipped more computers than in last year’s quarter, while Dell’s shipments dropped 17 percent.

 Lenovo and Japan’s Toshiba were the fourth and fifth-largest computer makers worldwide.

In the U.S., which accounts for about 23 percent of the world’s PC business, Dell regained the top spot after falling behind HP in the first quarter, even though its domestic shipments declined nearly 19 percent from 2008.

Dell’s shipments have fallen for several quarters as the recession has made U.S. businesses — key customers for Dell — more frugal about technology purchases.

HP was a close No. 2 in the U.S., followed by Acer.

The two research groups’ estimates don’t match up for Apple Inc. (Nasdaq: AAPL) and Toshiba, the fourth and fifth-largest in the U.S.

Gartner said Apple’s shipments edged up in the quarter, beating out Toshiba. IDC estimated a decline in Apple shipments and ranked it below Toshiba.

“People are focused on $600, $700 notebooks,” IDC analyst Bob O’Donnell. “Guess what Apple doesn’t have: any notebook below $999.”

Aggressive price cuts led to market share gains among U.S. consumers, according to Gartner, but that’s not great news for the PC makers. Dell and HP both said last quarter that lower prices and the popularity of cheap netbooks ate into profits; on Monday, Dell said it expects margins to be slimmer in the second quarter than in the first, due in part to sales of netbooks and low-end laptops.