Lenovo takes the PC crown from Hewlett-Packard

However, that kingdom continues to shrink as more people use smartphones and tablets.

By Jonathan Berr Jul 11, 2013 12:55PM
A Lenovo laptop keyboard is displayed at Pepcom in New York City, on April 11, 2013 (© Scott Eells/Bloomberg via Getty Images)Executives at China's Lenovo probably aren't doing too much celebrating after knocking Hewlett-Packard (HPQ) from the top spot in the personal computer market for the first time. After all, PC sales continue to deteriorate amid the surging popularity of smartphones and tablets.

Lenovo, which researchers Gartner and IDC estimate has a 16.7% share of global PC shipments, isn't resting on its laurels, either. It has only a one percentage point lead over HP. But it is continuing to reap the benefits of its 2005 acquisition of IBM's (IBM) PC business, which gave it the ThinkPad lineup of laptop computers. Quarterly shipments at Lenovo were little changed in the most recent period, while revenue declined slightly, which in this market is good news.
  
"The battle for PC leadership could certainly still go back and forth," said Yang Yuanging, Lenovo's CEO, in a statement to The Wall Street Journal.

HP is vowing a comeback. The paper quoted a spokesperson saying, "We don't like being No. 2 and we don't plan to stay there." HP took the title a few years ago from Dell (DELL). Founder Michael Dell is trying to take the Round Rock, Texas, company private in part because of its struggles in the declining PC market. 

Indeed, the outlook for this business remains bleak.

As The Journal noted, data from Gartner and IDC show sales have declined for five straight quarters -- the longest slump in the industry's history -- and that global PC shipments plunged 11% in the second quarter. Microsoft's (MSFT) introduction last year of the Windows 8 operating system has yet to generate the PC sales boost that some had expected (Microsoft owns and publishes moneyNOW, an MSN Money site.)

Still, there's hope. Sales may rebound slightly as computer makers produce less costly systems powered by new Intel (INTC) chips, though The Journal noted that no one expects sales to return to levels where they had been in recent years.
 
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.

More on moneyNOW

3Comments
Jul 11, 2013 2:03PM
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Owned one, power component went out, they would not fix it even thought it was recalled,

had to trash it....never again

Jul 11, 2013 2:10PM
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At one point ran a desktop imaging lab for a large company.  They had Dell, HP and Lenovo.  HP and Lenovo were about the same performance wise where Dell startup was much slower.  One difference was a new Lenovo out of the box smelled so much of chemicals it was almost overpowering.  Have to wonder if that is toxic.

 

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