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Lenovo PC growth proves there’s still life in the industry yet

You’d be right in thinking that sales in the traditional PC market have taken a tumble over the past few years. In fact, PC sales hit a 10-year low last week, as both Gartner and IDC released their somber-looking quarterly sales reports.

However, Lenovo’s latest announcement proves that there’s life in the old industry yet. Speaking to Reuters, the firm’s chief executive Yang Yuanqing said that Lenovo expected its PC business to return to positive growth for this year. The firm – which battles with HP as the largest PC maker in the world – saw a return to profit in March, but has suffered losses in its smartphone business due to rising component costs. Yang also confirmed that talks with Fujitsu were in advanced stages to integrate the firm’s personal computer business.

The announcement comes on the back of a report by Gartner that said that 61.1 million shipments were made in the second quarter, down 4.3 per cent from the same quarter in 2016. Meanwhile IDC said that combined desktop, notebook and workstation shipments were down 3.3 per cent to 60.5 million units for Q2, the lowest number recorded since 2007. And while that sounds like bad news, it is still better than the firm’s previous prediction of a 3.9 per cent decline. Despite the slump, some 60 million shipments are still being made per quarter, meaning over 650,000 PCs are switched on for the first time every day.

Rising component prices are being blamed for the declining sales figures, with an inflated market dampening enthusiasm from buyers and consumers alike. Shortages – and subsequent price hikes – in DRAM, LCD panels and solid state disks are all part of the problem, according to the analysts. 

In terms of who is selling what, HP has overtaken Lenovo at the top of Gartner and IDC’s rankings. Moving more than 1,000 shipments more than Lenovo in Q2, HP now has a 22.8 per cent market share, while Lenovo commands 20.5 per cent of the market, according to IDC. 

But despite losing its top spot in terms of sales, a spokesperson for Gartner said that Lenovo won’t be too concerned as it makes ‘a strategic shift from unit share gains to margin protection’.

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