Lenovo leads the way as PC market lives to fight another day

Worldwide PC shipments totalled 74.4 million units in the second quarter of 2014 (2Q14), signalling a year-on-year decline of -1.7%.

IDC claims the results reflect the smallest decline in global PC shipments since the second quarter of 2012 when declining shipments of mini notebooks combined with a surge in tablet sales to disrupt the PC market.

Buoyed by both continued business PC replacements and returning consumer interest, the preliminary results for 2Q14 are markedly better than the projected decline of -7.1% for the quarter.

Despite the end of Windows XP support in early April, it appears many Windows XP migrations continue to take place.

Most major vendors saw solid growth, and early indications also point to desktop shipments being stronger than expected in some areas, signalling continued business buying. The consumer side also appears stronger than expected, with growing activity among the lower-priced models as well as Chromebooks.

On a geographic basis, Europe, the United States, and Canada showed the strongest growth, reflecting more stable conditions while in contrast, emerging regions continue to see declining PC volumes as weaker economies and political issues combine to depress growth.

"The recent strength in mature regions is a positive sign," says Loren Loverde, Vice President, Worldwide PC Trackers.

"However, an important part of this strength is driven by the rebound from weaker demand last year and to potentially short-term replacement activity.

"We can look for some recovery in emerging regions going forward, but it may coincide with slower growth in mature regions.

"We do not see the recent gains as a motive to raise the long-term outlook although 2014 growth could get closer to flat, rather than the May projection of -6%."

The PC industry remains intensely competitive, with factors such as economy of scale and channel reach continuing to add to the shift toward mobility and new designs in driving market consolidation. While the top 5 PC vendors grew 9.8% year on year in 2Q14, the rest of the market declined -18.5% on the year.

"The better than expected results seem to arise from two places," adds Jay Chou, Senior Research Analyst, Worldwide PC Trackers.

"One encouraging factor was a good intake of lower-end systems, including Chromebooks, which coincides with the recent slowing in tablet growth and perhaps signals the beginning of some stabilization on the consumer side.

"In addition, a sizeable number of PCs are still running Windows XP and the impetus to upgrade them continued to boost shipments in the second quarter."

Vendor Highlights

Lenovo furthered its lead as the number 1 vendor, showing a strong rebound from a slower first quarter through continued aggressive expansion and pricing strategies. It grew in double digits in nearly all markets, though its home base in Asia/Pacific remained challenging.

HP remained in the number 2 position with growth surpassing 10%, the company's highest growth since the second quarter of 2010. EMEA and mature markets continued to be sources of growth, as were some last-minute public sector notebook shipments.

Dell shipped nearly 10.5 million units, its highest quarter in more than two years. The vendor has continued to tighten its channel relationships since its privatization and aggressively worked to streamline its operations and relationship with its partners.

Acer continues to diversify its business, with efforts into mobile devices and cloud storage as well as competitively priced PCs. Second quarter PC volume declined -2.5%, which was a marked improvement over recent trends.

ASUS grew 3.3% on the strength of strong shipments of entry and mid-level notebooks. The vendor has also taken steps to capture opportunities created by the sale of Sony's PC division.