Lenovo drives up PC sales in US even as global sales decline

Can a company find good news in an overall grim picture? Yes. At Lenovo.

Even as research firm reported a year-on-year decline in 2015 fourth quarter shipments as “the largest in history, surpassing the decline of -9.8% in 2013,” there’s at least some news for No. 1 seller Lenovo in the data. The company drove up sales in the U.S. and also grew its worldwide market share even as net sales dropped.

In fact, Lenovo, which unveiled a host of new machines at the CES show in Las Vegas last week while searching for more of a “wow” factor, is in a virtual tie for third place with Apple for U.S. PC sales after a strong fourth quarter. Lenovo increased sales 21 percent to 2.134 million units in the U.S., just behind Apple at 2.160 million. Apple sales climbed 6.5 percent from a year ago. In market share, Apple leads by 12.8 percent to Lenovo’s 12.6 percent, according to sales information from research firm Gartner.

Lenovo has made expansion of its U.S. sales a major point of emphasis over the last several years with increased marketing efforts that have included NFL and NBA sponsorships as well as a constantly refreshed product lines from tablets to desktops.

While Apple and Lenovo grew, No. 1 HP fell more than 8 percent to 4.6 million and a market share of 27.1 percent. Dell also faltered, its sales falling by 100,000 to 4.1 million. However, its share grew to 24.5 percent from 24.1 percent.

A shrinking pie

Analysis firms Gartner and IDC released their 2015 PC shipment data for 2015 on Tuesday, and both confirmed that Lenovo is gradually growing stronger in a market that fell 8 to 10 percent.

Among the top PC manufacturers, only Apple showed an increase last year. Its sales climbed some 2 percent.

The outlook isn’t much better for 2016. Gartner projects a 1 percent sales decline this year.

In the fourth quarter, Lenovo, which operates its global executive headquarters in Morrisville, expanded its lead over No. 2 HP in worldwide market share, hitting 20.3 percent which is up nearly a full percentage point from a year ago, according to Gartner.

However, sales declined to 15.4 million units from just over 16 million a year earlier, a drop of 4 percent.

HP’s market share grew slightly to 18.8 percent from 18.7 percent but its sales fell 8 percent to just over 14.2 million.

Lenovo has increased its market share for three consecutive quarters, Gartner noted, but also pointed out that the overall market continues to shrink.

The good news for Lenovo in sales increase comes from North America.

“Lenovo did particularly well in North America to offset shipment declines in EMEA, Latin America and Japan,” Gartner noted.

Overall, sales fell to 75.7 million, down 8.3 percent, according to Gartner. IDC reported similar figures.

For the year, sales were down 8 percent from 2014.

“The fourth quarter of 2015 marked the fifth consecutive quarter of worldwide PC shipment decline,” said Mikako Kitagawa, principal analyst at Gartner, in a statement.

Hopes for a boost from new Windows and holiday sales failed to materialize.

“Holiday sales did not boost the overall PC shipments, hinting at changes to consumers’ PC purchase behavior,” Kitagawa noted. On the business side, Windows 10 generally received positive reviews, but as expected, Windows 10 migration was minor in the fourth quarter as many organizations were just starting their testing period.”

Why is market troubled?

So why are sales struggling overall?

IDC offered this assessment:

“The PC market continued to face persistent challenges from longer-PC lifecycles and competition from mobile phones and tablets, despite the slowing growth in those markets.

“However, economic issues like falling commodity prices and weak international currencies, as well as social disruptions in EMEA and Asia/Pacific that disrupted foreign markets were a larger factor for 2015.

“Changes in the OS market also had a significant impact with the end of support for Windows XP and promotions of low-cost PCs driving a surge in replacements in 2014 that combined with the launch of Windows 10 and a free upgrade program to delay new system purchases in 2015.

“Lastly, while some very attractive new PCs have been launched, the market is taking some time to respond to new OS and hardware configurations – deciding when to upgrade and evaluating slim, convertible, detachable, and touch variations vs. more traditional PCs. Nevertheless, many of these products have received positive reviews and there’s potential for a faster commercial transition to Windows 10 in 2016 than we saw for prior versions of Windows.”