Worldwide PC Market Grapples with Slow Growth in Second Quarter as Lenovo Rises to Number 2 Position, According to IDC

FRAMINGHAM, Mass.--()--Worldwide PC shipments increased by 3.6% in the third quarter of 2011 (3Q11) compared to the same quarter in 2010, according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker. The results are up slightly from the 2.7% growth experienced in 2Q11, and just below IDC's August projections for 4.5% growth in the quarter. The Americas and EMEA were slightly below expectations while the Asia/Pacific markets were slightly ahead. The market continues to struggle as consumer discretionary income is diverted to other areas and business spending remains depressed in light of other priorities and a potential double-dip recession.

"For the moment, PCs have taken a backseat to a range of other devices competing for shrinking consumer and business budgets," said Jay Chou, senior research analyst with IDC's Worldwide Quarterly PC Tracker. "While growth is expected to stay in mid-single digits in the fourth quarter, we should see faster growth in 2012 and beyond based on easier comparisons and refreshed PC offerings as the industry better addresses the evolving usage models by integrating more of the features in ultra mobile devices."

"Most vendors continue to struggle with the slow market environment and product changes," said Loren Loverde, IDC vice president of Worldwide Consumer Device Trackers. "Although we don't see media tablets and other devices replacing PCs, questions on how products will evolve, and consumer interest in these and other categories are providing a distraction. And while price remains critical, many users are delaying PC purchases for the moment. Still, there are opportunities, as demonstrated by Lenovo's gains, and we expect PCs to find stronger demand in the coming years."

"The U.S. market came in about flat as expected, but failed to generate positive momentum given the state of saturation and lack of incentives for consumers to upgrade. Other inhibitors included the poor economic environment and, to a certain extent, iPad cannibalization," said David Daoud, IDC's Personal Computing Research Director. "As we approach the holiday season, the opportunity for low single-digit growth is real, but mostly as a result of poor market conditions last year, as opposed to a recovery in demand."

Regional Outlook

  • The United States market came in roughly flat with year ago shipments as the consumer and commercial demand remained constrained. Nevertheless, the market moved out of negative growth and HP registered strong growth going into the holiday season.
  • Europe, Middle East, Africa (EMEA) performed in line with forecast as the PC market continued to shrink in the third quarter across both desktop and portable form factors. The back-to-school season saw sustained weakness in consumer demand, with spending being diverted to media tablets and smartphones, while vendors and channel players remained focused on clearing consumer notebook inventory before taking new stock. Besides weak consumer trends, commercial demand has also slowed down, indicative of the increasing caution and postponed investments as a response to the current economic and financial turmoil in the Euro-zone and the U.S.
  • Japan continued to see growth in low single-digits. Lenovo finalized its merger with NEC, leveraging its scale and becoming the clear market leader. Although power rationing affected some commercial purchases, the market by and large continued to see more adoption of both consumer and business PCs.
  • Asia/Pacific excluding Japan (APeJ) had a strong quarter with double-digit growth, meeting expected volume. The region managed to regain momentum, reversing two previous quarters of only single digit growth due to gains in China and India, as well as good volume in Indonesia and Thailand.

Vendor Outlook -

  • HP grew 5.3% year on year, thanks to double-digit growth in the U.S. The company has been criticized for management missteps in the past few months, and been affected by slower consumer demand in many regions, but managed to outpace overall market growth nonetheless.
  • Dell continued to make gains in APeJ and CEMA, but declines in more mature regions pulled overall growth to –1.6% year on year. Dell faced tough competition and had sizable declines in some markets. However, its continued expansion efforts in China continued to pay dividends, maintaining double-digit growth in Asia/Pacific (excluding Japan).
  • Lenovo experienced strong gains across all regions as it continues its channel expansion and capitalizes on disarray among the other top players. Lenovo has now outpaced the market by more than 10% for the past 9 quarters, and by 20% or more in six of these periods. The results moved Lenovo ahead of Dell in 3Q11 after trailing by a small margin in the second quarter. Lenovo's partnership with NEC and the acquisition of Medion added incremental volume and provided new access to the Japanese and Western European markets.
  • Acer continued to struggle with inventory clearing and adjusting its strategy following declines in mini notebooks and its management shake-up. Total shipments were down 20.6% from a year ago – the fourth consecutive quarterly decline – but easier comparisons may help the company turn a corner in coming quarters.
  • ASUS had a strong quarter, boosting growth to over 30%. Strong gains in Asia/Pacific, along with improvements in EMEA, helped ASUS overtake Toshiba for the number 5 spot in worldwide shipments. While the vendor has had some difficulties adjusting for the decline in mini notebook PCs, its mainstream notebooks have done well, especially in emerging markets.
  • Apple Total shipments increased more than 20% in 3Q11, recovering from a dip to 15% growth in the second quarter but otherwise continuing a trend of more than 2 years with over 20% growth. The MacBook Air continues to boost volumes, and Apple's position in driving changes in consumer expectations for devices also positions it favorably relative to other players and tight consumer spending.

Top 5 Vendors, Worldwide PC Shipments, Third Quarter 2011 (Preliminary)
(Units Shipments are in thousands)

Rank   Vendor   3Q11
Shipments
  Market
Share
  3Q10
Shipments
  Market
Share
  3Q11/3Q10
Growth
           
1 HP 16,652 18.1% 15,811 17.8% 5.3%
2 Lenovo 12,579 13.7% 9,242 10.4% 36.1%
3 Dell 11,007 12.0% 11,183 12.6% -1.6%
4 Acer Group 9,207 10.0% 11,592 13.1% -20.6%
5 ASUS 6,002 6.5% 4,610 5.2% 30.2%
 
Others 36,432 39.7% 36,241 40.9% 0.5%
 
All Vendors 91,879 100.0% 88,679 100.0% 3.6%

Source: IDC Worldwide Quarterly PC Tracker, October 12, 2011
Table notes follow the last table

Top 5 Vendors, United States PC Shipments, Third Quarter 2011 (Preliminary)
(Units Shipments are in thousands)

Rank   Vendor   3Q11
Shipments
  Market
Share
  3Q10
Shipments
  Market
Share
  3Q11/3Q10
Growth
           
1 HP 5,284 28.6% 4,591 24.9% 15.1%
2 Dell 4,050 21.9% 4,352 23.6% -7.0%
3 Apple 2,086 11.3% 1,927 10.5% 8.3%
4 Toshiba 1,485 8.0% 1,589 8.6% -6.5%
5 Lenovo 1,252 6.8% 1,026 5.6% 22.0%
 
Others 4,298 23.3% 4,951 26.9% -13.2%
 
All Vendors 18,455 100.0% 18,436 100.0% 0.1%

Source: IDC Worldwide Quarterly PC Tracker, October 12, 2011

Table Notes:

  • Some IDC estimates prior to financial earnings reports.
  • Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold.
  • PCs include Desktops, Portables, Mini Notebooks and do not include handhelds, x86 Servers and Media Tablets (i.e. iPad and Android-based Tablets). Data for all vendors are reported for calendar periods.

IDC's Worldwide Quarterly PC Tracker gathers PC market data in over 80 countries by vendor, form factor, brand, processor brand and speed, sales channel and user segment. The research includes historical and forecast trend analysis as well as price band and installed base data.

For more information, or to subscribe to the research, please contact Kathy Nagamine at 650-350-6423 or knagamine@idc.com.

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 47 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

All product and company names may be trademarks or registered trademarks of their respective holders.

Contacts

IDC
Jay Chou, 650-350-6464
jchou@idc.com
or
Loren Loverde, 305-351-3115
lloverde@idc.com
or
David Daoud, 508-988-7502
ddaoud@idc.com
or
Michael Shirer, 508-935-4200
press@idc.com

Release Summary

Worldwide PC shipments increased by 3.6% in the third quarter of 2011 (3Q11) compared to the same quarter in 2010, according to the IDC Worldwide Quarterly PC Tracker.

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Contacts

IDC
Jay Chou, 650-350-6464
jchou@idc.com
or
Loren Loverde, 305-351-3115
lloverde@idc.com
or
David Daoud, 508-988-7502
ddaoud@idc.com
or
Michael Shirer, 508-935-4200
press@idc.com