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Lenovo secures third spot in global PC market

Posted: 10 Sep 2007     Print Version  Bookmark and Share

Keywords:PC market  PC shipments  Acer  Lenovo 

Inching up a notch, Lenovo Group Ltd took the third spot in the global PC market in Q2, bumping off Taiwan-based rival Acer Inc. But with Acer's aggressive acquisition moves, it remains to be seen how long the China-based Lenovo could hold on to the post.

Lenovo shipped 49 lakh PCs worldwide in Q2, up 22.9 per cent from 39.6 lakh in Q1, according to a preliminary ranking by iSuppli Corp. This marked the largest increase among the world's Top-5 and Top-10 PC suppliers?although it was only marginally ahead of the 17 percent sequential growth achieved by Apple Inc.

On a unit basis, Lenovo's shipments rose by 908,000 in Q2 compared to the previous quarter. This was a remarkable accomplishment, considering that overall shipments declined sequentially during the period, decreasing by 1.7 per cent, or by 10.3 lakh units, the firm said.

"Lenovo's sales were propelled by strong demand in the domestic Chinese market," said Matthew Wilkins, principal analyst for compute platforms at iSuppli. "The company previously stated that it would deliver a stronger performance in the second quarter than it did in the first, and it duly delivered."

The company's growth caused its market share to rise to 7.9 per cent in Q2, up from 6.4 per cent in Q1. The rise allowed Lenovo to take the third position in the global PC market, reclaiming the rank from Taiwan's Acer, which took the No. 3 place from Lenovo in Q1.

Down one spot, Acer's PC shipments slid by 0.2 per cent in Q2. "Acer's performance was better than the seasonal results of the overall PC market during the second quarter," Wilkins said. "However, the Top-5 PC OEMs enjoyed such strong results that even a very small sequential decline is against the trend we saw during the quarter."

Third place tug-of-war
Lenovo should enjoy its time at No. 3?because it may not last for long. Acer's planned acquisitions of Packard Bell and Gateway will cause the company to gain approximately 2.5 percentage points of market share. If those acquisitions were figured into the Q2 rankings, Acer would have retained its third-place ranking, Wilkins noted.

As a result of the planned acquisitions, Acer is expected to take a firm grip of the third-place position in the coming quarters.

Lenovo may now be in third position, but for how long?

Meanwhile, Hewlett-Packard Co. (HP) cemented its position as the worldwide leader in PC shipments in Q2. HP increased its shipments to 1.12 crore units, up 4.4 per cent from 1.07 crore units in Q1?and up by a whopping 35 per cent from the Q2 of 2006 and market share rose to 18.3 per cent, up from 17.2 per cent in Q1. HP's growth in PC shipments outpaced the expansion of the overall PC industry by nearly a factor of three.

Second-ranked Dell Inc., on the other hand, posted a 5.6 per cent sequential increase in PC shipments, the second-best performance among the Top-5 PC OEMs. However, Dell's shipments were down by 5 per cent compared to Q2 of 2006, reflecting the its continued struggles. Despite this, the shipment gap between Dell and HP remained constant between the second and first quarters of 2007, at 17 lakh units.

Most of the Top-5 PC OEMs had a strong quarter, with four of them posting a sequential increase in sales. Furthermore, four of the Top-5 experienced double-digit growth in Q2 compared to the same period in 2006.

Increasing Asia market share
The Top-3 Asian PC vendors?Lenovo, Acer, and Toshiba Corp.?in Q2 generated 56.3 per cent of the combined shipments of the Top-2 North American PC vendors, HP and Dell, up 54 per cent in the prior quarter. This figure illustrates that the Asian PC OEMs can increase their penetration of the market?even without major acquisitions.

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