Thursday, October 11, 2012

(Reuters) - China's Lenovo Group Ltd edged out Silicon Valley icon Hewlett-Packard Co to become the world's No. 1 PC maker in the third quarter, according to new data released by research house Gartner on Wednesday.

Lenovo's laptop PCs are displayed at an electronic shop in Tokyo September 5, 2012. REUTERS/Kim Kyung-Hoon
Lenovo's laptop PCs are displayed at an electronic shop in Tokyo September 5, 2012.
Credit: Reuters/Kim Kyung-Hoon

SAN FRANCISCO | Wed Oct 10, 2012 8:20pm EDT

A rival to Gartner, IDC, still ranks HP in the lead -- but by less than half a percentage point -- in terms of PC shipments worldwide. But both studies reinforce HP's struggles against rivals as new CEO Meg Whitman tries to overhaul the stalled 73-year-old company.

Worldwide shipments of personal computers fell over 8 percent last quarter, according to both research firms, which blamed myriad factors including retailers and vendors ridding themselves of older inventory ahead of the launch of Microsoft's Windows 8 operating system, the growing popularity of mobile gadgets like tablets, and a slowing economy.

PC demand growth has crumbled over the past year as more consumers flock to ultra-portable and increasingly powerful tablets and smartphones for basic computing.

Both sets of data show that Lenovo, Acer and other Asian PC makers are taking share away from U.S. competitors HP and Dell, which held on to the No. 3 spot in the quarter.

Lenovo's rise highlights the advance of China's technology firms on the world stage in recent years thanks to a combination of aggressive pricing, overseas acquisitions and taking advantage of a fast-growing home market.

The Chinese firm, which vaulted into the PC market by buying IBM's personal computer division in 2005, took the top spot for the first time by growing its market share to 15.7 percent, shipping an estimated 13.77 million units during the quarter, up nearly 10 percent from a year ago, Gartner said.

HP's global PC share stood at 15.5 percent after shipping 13.55 million units, down 16.4 percent from a year ago, Gartner said, adding that this is the first time HP has given up the top PC vendor position since 2006.

IDC had HP at the No. 1 spot with 15.9 percent market share and Lenovo coming a close second with 15.7 percent share.

HP responded to Gartner's study by saying IDC's was more expansive.

"While there are a variety of PC share reports in the market, some don't measure the market in its entirety," HP said in a statement. "The IDC analysis includes the very important workstation segment, and therefore is more comprehensive."

Shares of HP on Wednesday closed 1.32 percent lower at $14.18, after touching $14.02, its lowest level since October 2002.

Analysts say PC makers have been sideswiped by still-sluggish growth in consumer and corporate spending across the globe, even in once-reliably hot markets like China, Lenovo's home turf. The industry is now grappling with uncertainty out to 2013, partly because of a proliferation of computing devices from tablets of all sizes to smartphones.

"PCs are going through a severe slump," said Jay Chou, senior research analyst, IDC's Worldwide PC Tracker.

"A weak global economy as well as questions about PC market saturation and delayed replacement cycles are certainly a factor, but the hard question of what is the 'it' product for PCs remain unanswered."

(Reporting By Poornima Gupta; Editing by Phil Berlowitz)
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