beyondbrics

One small step for Lenovo, one giant leap for the Asian PC industry? Lenovo has overtaken Dell to become the world’s second-largest PC vendor, according to shipment data in the third quarter.

The era of US dominance of the PC industry seems to be coming to an end, and Asian companies, which have been making the world’s PCs for many years now, are moving to occupy the top spots in the PC brands as well.

The change was marked by both IDC and Gartner in their latest PC market figures released on Wednesday in the US. As usual, the two research firms’ numbers differ slightly: According to IDC, Lenovo’s global market share jumped 36.1 per cent from the same period last year to 13.7 per cent, while Gartner has a 25.2 per cent year-on-year increase to 13.5 per cent market share.

That leaves China’s Lenovo second only to Hewlett-Packard – a company which has been trying to exit the PC business.

Although HP is still the uncontested leader with an 18.1 per cent global market share in the third quarter according to IDC, and still growing, the firm’s recent back-and-forth on what it wants to do with its PC unit has called the future of this trend into question.

And Lenovo is closing the gap. For the past five quarters, Lenovo has been growing faster than any other PC vendor, and despite its strong reliance on China, this growth has broadened beyond its home market to other emerging markets, Japan and Europe.

Lenovo is not alone. Asustek, the Taiwanese PC brand, which currently occupies fifth rank behind Acer, is growing almost as fast as Lenovo.

Acer itself may be in a trough right now, with a more than 20 per cent year-on-year drop in shipments in the third quarter as its netbook business got hit hard by the sudden rise of tablets. But analysts believe Acer’s suffering from inventory adjustments and a management reshuffle should be over soon, putting the company back in the game.

“With the challenges facing HP […], we see opportunity for market shares gains for its largest competitors, especially for the Asia brand PC companies, such as Lenovo, Acer and Asustek,” said Kirk Yang, head of technology hardware in Asia for Barclays Capital, in a recent note.

Lenovo is jubilant at what it sees as a new breakthrough. “Lenovo has captured incredible marketplace momentum to surpass two competitors to capture the #2 spot in worldwide PCs over the span of just two quarters,” said Yang Yuanqing, chief executive.

There is one caveat: PCs are no longer a particularly attractive industry to be in, with shrinking margins, ever-shorter product cycles and consumers who are seduced by the rise of tablets and smartphones.

Those are the reasons both HP and Dell are looking to strengthen services and other hardware fields such as servers.

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