Why slowdown is good news for world's No. 1 PC-maker

Chinese brand Lenovo ousted HP as world’s No. 1 PC manufacturer sometime in the second quarter of 2013, and has ever since remained perched on top of the ladder.

The third quarter of that year, however, saw a steep decline in PC shipments, and the latest quarter this year (Q2, 2015), saw a sharp decline too (-11.8 per cent).

Overall, worldwide PC shipments are expected to fall by -8.7 per cent in 2015 and not stabilise until 2017, according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker.

The latest forecast has growth declining through 2016 – which will make five years of declining shipments.

That sort of prolonged decline in shipments should have the world’s largest PC-maker worried stiff, but that doesn’t seem to be the case.

Emirates 24|7 caught up with Mohammed Hilili, General Manager, Lenovo Gulf, on the sidelines of the ongoing Gitex shopper Autumn edition to ask why he was still smiling.

“The PC market has been a bit slow in the latest couple of quarters. We have seen consolidation among players, with some players exiting the market while some others have lost market share,” Hilili told us.

But here’s why he is happy about the situation.

“The IDC report clearly shows that the top three vendors have been gaining market share, with the trend showing that the top three will control almost 70 per cent of the market by the end of this year, or early next year,” he says.

According to IDC data, Lenovo held an 18.8 per cent share of the PC market in 2014, followed by HP 17.5 per cent, and Dell 12.8 per cent. Together, the three accounted for less than 50 per cent of the market share.

If that combined market share of the Top 3 goes up to 70 per cent as Hilili says is forecast, Lenovo, being the leading player, will benefit and grow its dominance of the market rather than lose its stronghold.

“We expect a 20 per cent sales growth year-on-year,” says Hilili.

Indeed, in the latest quarter (Q2, 2015), Lenovo held onto the top position with shipments of 13.4 million units. According to IDC data, Lenovo held a 20.3 per cent share of the global PC shipments in the latest quarter, and the Top 3 commanded a 52.3 per cent market share.

“Lenovo is No. 1 worldwide, and we intend to grow our market share further, and consolidate this business. That’s why our expectation is that there will always be growth for us within this domain,” he says with a big grin on his face.

Samsung and Sony famously exited the PC market recently, and Hilili believes that more fringe players may give up in the near future.

So, at a time when several players are falling by the wayside, what’s Lenovo’s secret sauce that’s keeping it firing on all chips?

“If you look at the PC business, we are the innovators. We were the first to launch convertibles in the PC market – both in laptops as well as tablets with our Yoga series. We continue to invest in R&D. We have a laser focus on the PC and tablet business, because this is our bread and butter. We are completely focused on the PC business, and our ambition is to further consolidate our position,” he maintains.

“As per latest data, we are No. 1 in Gulf in terms of PCs and tablets overall. In terms of consumer PCs, the gap between us and the No. 2 is even bigger,” he notes.