PC market continues to show signs of recovery

After a couple of difficult years of declines the PC market is returning to some stability

Thanks largely to the termination of Windows XP support and a in demand from consumers for top-end tablets the PC market continues to rebound from a couple of dire years delivering a flat second quarter.

The latest figures from Gartner show that after two years of declines the industry enjoyed flat growth in Q2 with spending in mature markets balancing out a decline in more emerging territories.

In Q2 worldwide PC shipments improved by 0.1% from the same period in 2013 hitting 75.8m units with Lenovo holding onto its crown as the top vendor, with a 19.2% market share, with HP (17.7%) and Dell (13.3%) making up the rest of the leading pack.

The PC market continues to be a mixed picture with a split in spending behaviour between emerging and mature markets as well as an ongoing challenge in the form of low cost tablets.

“While the worldwide PC market stopped two years of declining shipments in the second quarter, there were mixed results, as stabilization in developed markets was offset by a decline in emerging markets,” said Mikako Kitagawa, principal analyst at Gartner. “The PC industry in emerging markets has been impacted by the allure of low-cost tablets."

A mixture of factors, including the need for a refresh because of a move away from XP, and signs that the tablet market might be peaking helped the PC market gain stability

“The PC market's installed based has been declining as buyers switched to tablets and smart phones for entertainment and social media consumption. The 2Q14 results suggest that the consumer installed base restructuring peaked during 2013. We are seeing a slowdown in premium tablet sales, which have already penetrated a large number of households," added Kitagawa.

"PCs are now growing off a smaller installed base of newer devices, with more engaged users. Therefore, we expect to see slow, but consistent, PC growth. While the end of support for Windows XP drove some of the sales in developed markets, it is the underlying business replacement cycle that will stabilize the market," she concluded.

The response from Lenovo to its market share gains to cement its position at the top of the market was to highlight its strategy of using the PC as one prong in a hardware approach that also tapped into other growth areas.

“Today, we are number 1 in PCs, number 2 in the growing PC+Tablet market and number 3 in smart connected devices.  Now we have a potent balance: a proven core PC business and new strong growth engines in mobile devices and in our enterprise business. These results show the formula for success – a clear strategy, innovative products, operational excellence, and a diverse global team – is clearly working," said Yang Yuanqing, chairman & CEO, Lenovo.

"The global PC industry is a more than $200b business, and the market is getting healthier. Through innovation, consolidation and operational excellence, I am confident we will remain on track to achieve our targets and deliver on our commitments for profitable growth in our core businesses," he added.

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