Lenovo Wrestles PC Crown from HP; IDC Says Hold the Boat

Paul Lilly

If you've been paying attention to the PC wars, you've known for awhile it was pretty much a foregone conclusion that Lenovo at some point would leapfrog Hewlett-Packard (HP) to become the world's top PC supplier. Well, one major research firm claims that's exactly what happened in the third quarter of 2012, while a second firm still has HP ranked No. 1. Sadly, one thing all the major bean counters agree on is that the PC market in general is looking pretty pathetic. Let's take a look.

According to Gartner's data, Lenovo took a slight lead over HP in Q3, shipping over 13.7 million PCs for a 15.7 share of the overall PC market. HP shipped more than 13.5 million PCs and dropped into second place with a 15.5 percent share. Dell (10.5 percent), Acer (9.9 percent), and Asus (7.3 percent) round out the top 5 spots.

Looking at the market as a whole, Gartner says PC sales are in a slump leading up to the release of Windows 8.

"A continuing slowdown in consumer PC shipments played a big part in the overall PC market decline," said Mikako Kitagawa , principal analyst at Gartner. "The third quarter was also a transitional quarter before Microsoft's Windows 8 operating system release, so shipments were less vigorous as vendors and their channel partners liquidated inventory.

"Retailers were conservative in placing orders as they responded to weak back-to-school sales. By the end of September, retailers were focused on clearing out inventory in advance of the Windows 8 launch later this month," Kitagawa added. "On the professional side, there was minimum impact from Windows 8 in the quarter because the professional market will not adopt Windows 8 PCs immediately after the release."

IHS iSuppli's outlook on the PC market was even more grim, saying that even the normally busy back-to-school shopping season was a bust.

"There was great hope through the first half that 2012 would prove to be a rebound year for the PC market," said Craig Stice , senior principal analyst for computer systems at IHS. "Now three quarters through the year, the usual boost from the back-to-school season appears to be a bust, and both AMD and Intel’s third-quarter outlooks appear to be flat to down. Optimism has vanished and turned to doubt, and the industry is now training its sights on 2013 to deliver the hoped-for rebound. All this is setting the PC market up for its first annual decline since the dot-com bust year of 2001."

Yikes! As to the topic of Lenovo versus HP, IHS iSuppli didn't weigh in on the matter, but International Data Corporation (IDC) did. According to IDC's data, Lenovo does indeed own a 15.7 percent share of the market, just as Gartner reported, but said that still ranks No. 2 behind HP, which edged out its rival with a 15.9 percent share. HP may wish to cling to IDC's numbers so that it can still wave around its "We're No. 1!" flag, but for how long? In the third quarter of 2011, IDC had HP ahead of Lenovo by 4.3 percentage points (17.4 percent versus 13.1 percent), a lead that has now been reduced to two-tenths of a percent.

It's splitting hairs to argue over a fraction of a percent, especially when sales are so bad all around, even for Apple, which has seen its shipments erode in recent months.

"PCs are going through a severe slump," said Jay Chou , senior research analyst, Worldwide PC Tracker. "The industry had already weathered a rough second quarter, and now the third quarter was even worse. A weak global economy as well as questions about PC market saturation and delayed replacement cycles are certainly a factor, but the hard question of what is the 'it' product for PCs remain unanswered. While ultrabook prices have come down a little, there are still some significant challenges that will greet Windows 8 in the coming quarter."

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