PC competitors position for share and growth, despite challenges, according to IDC


Oct 12, 2016

FRAMINGHAM, Mass., October 11, 2016 – Worldwide PC shipments totaled nearly 68 million units in the third quarter of 2016 (3Q16), a year-on-year decline of 3.9%, according to the International Data Corporation (IDC) Worldwide Quarterly PC Tracker. Shipment volume continued to decline, but the results were about 3.2% ahead of projections.

The better than expected results reflect competition among the market leaders and an effort to capitalize on market consolidation and future stabilization. After struggling to reduce inventory over the past year or more, PC vendors are now rebuilding inventory for the second half of the year. Combine this with an improving outlook, a race for market leadership between Lenovo and HP, and efforts to guarantee component supplies, and market drivers are taking shape. The seasonal increase in volume during the second half of the year and projected stronger demand going forward provide some justification for more aggressive positioning.

In addition, the largest vendors have consistently gained share and can exert a growing advantage over smaller players by dominating component supply and shelf space. Market leaders continued to gain share in the United States and globally. The top 3 PC vendors took just over 58% of the worldwide market in the third quarter, up from 55% a year ago and 51% in 2014. Nevertheless, total PC shipments are still declining and some of the short-term improvement may come out of next year rather than accelerating longer-term buying.

"We are very pleased to see some improvement in the market," said Loren Loverde, vice president, Worldwide PC Trackers & Forecasting. "Industry efforts to update products to leverage new processors and operating systems, to deliver a better computing experience encompassing more mobile, secure, and faster systems, and to accelerate PC replacements have been critical. These improvements are accumulating, and set the stage for a stronger market going forward."

Mature regions continued to perform best, with the United States taking the lead with a second consecutive quarter of positive growth. In other developed markets growth was stable or improved slightly with near flat growth in Japan and Canada, followed by a small decline in Europe, the Middle East and Africa (EMEA). Shipments in Asia/Pacific (excluding Japan) continued to decline in mid-single digits while Latin America struggled with double-digit declines.

"Although we've now seen two consecutive quarters of strong market growth, we believe the strong market performance has less to do with strengthening demand and more to do with increased appetite from the channel for inventory," added Linn Huang, research director, Devices & Displays. "We will need a strong holiday season to ensure that we don't enter 2017 in a poor inventory situation."

Regional Highlights

The United States PC market saw another quarter of positive growth. As expected, Chromebooks had another banner quarter in the K-12 market. Additionally, inventory replenishment in the channel continued, helping to drive total PC shipments above 17.5 million units. However, despite the positive growth, IDC maintains a cautious outlook for the fourth quarter.

Europe, Middle East, and Africa (EMEA) PC shipments were stronger than forecast thanks to healthy notebook sales, while desktop sales were very much in line with the forecast. The buildup of expectations towards the year-end business (e.g. mobility adoption) and holiday season promotions like Black Friday, combined with the anticipation of price increases related to some components, pushed the volumes up in the region for notebook.

The Asia/Pacific (excluding Japan) PC market came in slightly above expectations, although it remained constrained with shipments declining year on year. Efforts to reduce channel inventory continued, allowing for stronger than expected sell-in in China, while the upcoming festive season led to a sequentially higher consumer quarter in India. Several corporate projects that were rolled out across the region, coupled with stronger demand from business users in China, helped alleviate the decline in otherwise soft commercial markets.

The Japan PC market returned to positive growth in the third quarter, stabilizing after a substantial drop in 2015. Demand for Windows 7 systems remained a key driver as companies still using the OS purchased systems ahead of price increases.

Vendor Highlights

Lenovo held onto the top spot, although its lead over HP diminished to the smallest margin since Lenovo took the top position in 2013. Slower growth in China (where Lenovo has its largest share) has made it more difficult for Lenovo to defend its market lead. The recent third quarter of 2016 marked Lenovo's sixth consecutive year-on-year decline in total shipments, trailing other market leaders who have returned to positive growth. Nevertheless, Lenovo continues to outpace the market and has made strong gains in key markets like the United States.

HP Inc. had a solid quarter with 3.3% growth globally. HP Inc. further consolidated its dominance of the U.S. market, where it grew 5.8% and boosted share to almost 30% for the first time. The company also saw gains in EMEA and Japan.

Dell also had a productive quarter with shipments of 10.7 million units, its second highest quarterly shipment volume since 2011. In 3Q16, Dell saw strong gains in Japan and the United States while EMEA and Latin America also improved.

Apple shipments continued to decline as the company prepares to refresh its PCs.

ASUS also continued to gain share overall with shipments increasing over 5.2% in 3Q16. Rebounding shipments in Japan captured the company's highest growth, but substantial gains in the United States, EMEA, and Canada delivered important gains with higher volume – helping to offset challenges in Asia/Pacific (excluding Japan) and Latin America.

Top 5 Vendors, Worldwide PC Shipments, Market Share, and Year-Over-Year Growth, Third Quarter 2016 (Preliminary) (Shipments are in thousands of units)

Vendor 3Q16 Shipments 3Q16 Market Share 3Q15 Shipments 3Q15 Market Share 3Q16/3Q15 Growth
1. Lenovo 14,511 21.3% 14,990 21.2% -3.2%
2. HP Inc. 14,392 21.2% 13,926 19.7% 3.3%
3. Dell 10,751 15.8% 10,120 14.3% 6.2%
4. Apple 5,014 7.4% 5,761 8.1% -13.0%
5. ASUS 4,693 6.9% 4,460 6.3% 5.2%
Others 18,638 27.4% 21,480 30.4% -13.2%
Total 67,999 100.0% 70,737 100.0% -3.9%

Source: IDC Worldwide Quarterly PC Tracker, October 11, 2016

Table notes follow the last table

## View Chart

Top 5 Vendors, United States PC Shipments, Market Share, and Year-Over-Year Growth, Third Quarter 2016 (Preliminary) (Shipments are in thousands of units)

Vendor 3Q16 Shipments 3Q16 Market Share 3Q15 Shipments 3Q315 Market Share 3Q16/3Q15 Growth
1. HP Inc. 5,255 29.9% 4,968 28.8% 5.8%
2. Dell 4,602 26.2% 4,154 24.1% 10.8%
3. Lenovo 2,669 15.2% 2,281 13.2% 17.0%
4. Apple 2,079 11.8% 2,395 13.9% -13.2%
5. Acer Group 765 4.4% 737 4.3% 3.8%
Others 2,184 12.4% 2,723 15.8% -19.8%
Total 17,554 100.0% 17,259 100.0% 1.7%

Source: IDC Worldwide Quarterly PC Tracker, October 11, 2016

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, Ultraslim Notebooks, Chromebooks, and Workstations and do not include handhelds, x86 Servers and Tablets (i.e. iPad, or Tablets with detachable keyboards running either Chrome, Windows or Android). Data for all vendors are reported for calendar periods.

IDC's Worldwide Quarterly PC Tracker gathers PC market data in over 90 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.

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