Cary News

April 11, 2014

Lenovo cements No. 1 PC ranking

Lenovo continued to outpace its competitors in the first quarter, posting double-digit gains in PC shipments worldwide in defiance of a depressed market.

Lenovo continued to outpace its competitors in the first quarter, posting double-digit gains in PC shipments worldwide in defiance of a depressed market.

The world’s largest PC maker also posted gains in the vital U.S. market, where it jumped from No. 4 to No. 3 – behind HP and Dell – in the rankings issued by market research firm IDC. Rival market research firm Gartner ranked Lenovo No. 4 behind Apple but reported that the gap between the two narrowed substantially.

Lenovo, which moved past HP last year to become the undisputed No. 1 in the worldwide PC market, is based in China but has a headquarters in Morrisville that employs about 2,200 workers. Lenovo’s local presence is expected to double when it completes its pending $2.3 billion acquisition of IBM’s low-end, x86 server business.

Several factors have contributed to Lenovo’s surge, said Loren Loverde, a vice president at IDC.

“I think they have a great brand and a great product, to begin with,” Loverde said. In addition, “Lenovo has been fairly aggressive in introducing new designs.”

Lenovo also has benefited from its dominant position in the Chinese market, which was one of the world’s fastest-growing markets in recent years but has slowed recently, Loverde said.

Decline in PC market

Overall, the global PC market has declined for eight consecutive quarters, and the drop in 2013 was the worst ever as consumers gravitated to tablets and other mobile devices. The latest quarterly decline, however, wasn’t as deep as in the fourth quarter.

Microsoft’s decision to pull the plug on supporting its aging XP operating system contributed to the relatively stronger demand, according to the two firms.

“We expect the impact of XP migration worldwide to continue throughout 2014,” Mikako Kitagawa, principal analyst at Gartner, said in a prepared statement.

Gartner estimated that overall PC shipments fell 1.7 percent in the first quarter compared with a year ago. IDC reported a decline of 4.4 percent, falling short of a projected decline of 5.3 percent.

By contrast, Lenovo’s shipments rose 10.9 percent in the first quarter by Gartner’s reckoning. That gave it a market share of 16.9 percent, versus 16 percent for runner-up HP.

According to IDC, Lenovo’s shipments rose 10.5 percent, and it had a market share of 17.7 percent. HP’s market share was estimated at 17.1 percent.

The U.S. market fared better than the global market in the first quarter. IDC estimated that PC shipments fell six-tenths of a percent, while Gartner estimated a 2.1 percent uptick.

IDC estimated that Lenovo achieved a 10.8 percent share of the U.S. market after its shipments jumped 21.2 percent in the first quarter.

Gartner put Lenovo’s U.S. market share at 10.4 percent with shipments 16.8 percent higher.

But the gap between HP, No. 1 in the U.S. market, and Lenovo is enormous. Gartner and IDC put HP’s U.S. market share at 25 percent and 25.6 percent, respectively.

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