The other shoe has dropped in the world of PC sales rankings. Lenovo is no longer the world’s top PC seller, according to the two most widely reported statistics compiled by global research firms. The new No. 1 is HPE as Lenovo falls behind due in part to a plunge in one of its strongest growth markets: The United States.
Perhaps worse news is the fact Lenovo’s sales fell while its top two rivals made gains.
Gartner and IDC both reported late Wednesday that HPE had regained the top spot, which Lenovo had held for the past four years.And Dell, ranked No. 3, is gaining share as Lenovo falters.
Thus Lenovo can find no consolation in the statistics which in the past have shown Lenovo gaining market share even as global PC sales fell. And growth in U.S. markets for businesses as well as consumers gave Lenovo execs reason for optimism.
However, a drop-off in U.S. sales contributed to Lenovo’s loss of its No. 1 ranking in the first quarter according to data from IDC. But Gartner, IDC’s rival, reported that Lenovo kept a slight overall lead.
This quarter, U.S. sales fell more than 16 percent in the U.S., Gartner says.
Is Lenovo’s sales decline part of a shift in pricing strategy? Gartner thinks so.
Gartner notes that Lenovo’s “2Q17 results could reflect Lenovo’s strategic shift from unit share gains to margin protection,” adding that “the strategic balance between share gain and profitability is a challenge for all PC vendors.”
Whether that is a correct assumption, the bottom line is that Lenovo sales fell 8.4 percent year-over-year, according to Gartner, after two straight quarters of sales growth.
Overall, Lenovo shipped just south of 12.2 million machines in the quarter, down from more than 13.3 million in 2016. That big drop also cost Lenovo nearly a point in market share, which slipped to 19.9 percent.
The numbers are similar at IDC.
Lenovo sales dropped 5.7 percent year-over-year to just under 12.45 million. That decline cut Lenovo’s global market share to 20.5 percent from 21.1. percent.
IDC noted one point of positive news for Lenovo, however.
“The vendor saw significant slowing in North America but still managed to grow its notebook business overall,” IDC noted.
HPE, Dell surge
Overall, PC sales continued a slump in shipments that Gartner says has now reached 11 consecutive quarters.
HPE and Dell made substantial gains to buck the trend.
IDC says HPE increased sales 6.2 percent to nearly 13.8 million. Gartner reports HPE sales increased 3.3 percent to almost 12.7 million.
In market share, HPE stands at 22.8 percent, up from 20.7 year-over-year, says IDC. Gartner puts HPE at 20.8 percent, an increase from 19.2 percent.
Dell sales climbed 3.7 percent to 10.3 million and its market share is up to 17.1 percent from 15.9 percent, says IDC. Gartner says Dell shipped 9.6 million machines and improved market share more than a point to 15.6 percent.
Apple, meanwhile, shipped 1.7 percent more machines (4.3 million) than a year ago, says IDC. Gartner said its Apple numbers indicated a slight decline.
State of the industry
So what’s happening overall globally?
“Amid some unevenness in market trends across the regions, the global PC market has continued to trend toward stabilization,” said Jay Chou, research manager of the IDC Worldwide Personal Computing Device Tracker report. “Despite recent issues wrought by component shortages and its effect on system prices, we expect the momentum of commercial market replacements will contribute to eventual market growth. Consumer demand will remain under pressure, although growth in areas like PC gaming and the increasingly attractive portfolio of sleek Windows-based systems will help push the consumer market to stabilize as well.”
Here’s Gartner’s view:
“Higher PC prices due to the impact of component shortages for DRAM, solid state drives (SSDs) and LCD panels had a pronounced negative impact on PC demand in the second quarter of 2017,” said Mikako Kitagawa, principal analyst at Gartner “The approach to higher component costs varied by vendor. Some decided to absorb the component price hike without raising the final price of their devices, while other vendors transferred the costs to the end-user price.”
Whatever the real story is, Lenovo, which operates one of its two executive headquarters in Morrisville, is now struggling while HPE and Dell are running to daylight.