Sales of PCs worldwide were flat in the second quarter, according to research firm Gartner. The two largest U.S. companies did much worse. And the trend is likely to continue since neither Dell (NASDAQ: DELL) nor Hewlett-Packard (NYSE: HPQ) has managed to break into the rapidly growing tablet sector or the new market for ultrabooks. That inability certainly will cause their market shares to dive rapidly.
The second-quarter report includes a top line observation:
Worldwide PC shipments totaled 87.5 million units in the second quarter of 2012, a decline of 0.1 percent from the second quarter of 2011, according to preliminary results by Gartner, Inc.
Three Asia firms more than held their own. Lenovo’s share of the global market rose from 12.7% to 14.7% nearly tying it with market leader HP, which had a share of 14.9%. But HP’s share dropped from 16.9% in the same quarter a year ago. The market share of Acer rose from 10.6% to 11%. ASUS’s share rose impressively from 5% to 7%. Dell did nearly as badly as HP as its piece of the worldwide market dropped from 12.1% to 10.7% from the second quarter of last year to the second quarter of this one.
One of the most vexing issue for the two U.S. companies is that global PC sales have become a zero-sum game. The long period in which PC sales rose rapidly is over, at least for the foreseeable future. The gains made by the three Asian companies come to some extent from their early introduction of new products such as ultrabooks. And, although Apple (NASDAQ: AAPL) is not among the five largest manufacturers, its iPad sales have grown at remarkable speed. Industry giant Samsung has made inroads with its Galaxy tablet as well.
If there is any large global industry in which the failure to innovate has cost the largest companies their advantages, it is the PC industry. The period in which desktops and laptops were the most critical factor in unit sales is over, probably for good. Dell and HP have built nothing to replace them.
Douglas A. McIntyre
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