Apple and Lenovo Avoid Rapid Plunge in PC Market

A new report finds that global PC shipments are set to decline for the first time in 11 years. There are a host of factors causing the industry to feel pain, but the fall of the traditional desktop has been a growing trend in the wake of more popular and stylish computing devices. This trend is most evident in the United States.

Worldwide PC shipments are estimated to decline 8.3 percent from last year to 87.5 million units in the third quarter, according to research firm Gartner. For the first time since the third quarter of 2006, Hewlett-Packard (NYSE:HPQ) slipped to the number two spot, shipping an estimated 13.55 million units, a 16.4 percent decline. China’s Lenovo took the number one position in global PC shipments for the first time in the company’s history. HP held onto the largest market share in the U.S., but the results were not encouraging.

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Four of the top 5 vendors in the U.S. market experienced sharp shipment declines. As the chart below shows, HP logged an estimated 4.14 million units in the third quarter, compared to 5.13 million units in the same period last year. The company still has a 27 percent domestic market share, but the slowdown in shipments represents a 19.3 percent decline. Dell (NASDAQ:DELL), the number two PC vendor in the U.S., saw its PC shipments decline 15.9 percent to 3.27 million units, compared to 3.89 million units. Meanwhile, Acer Group and Toshiba posted plunges of 28.2 percent and 33.4 percent, respectively. Lenovo, which purchased International Business Machines’ (NYSE:IBM) PC business in 2005, was the only vendor among the top 5 to show an increase in shipments.

Although the company still posted a decline, Apple (NASDAQ:AAPL) managed to avoid the rapid plunge seen in most domestic vendors. The world’s most valuable company shipped a little more than 2 million units in the third quarter, compared to 2.21 million units in the third quarter of 2011. Despite the 6.1 percent slowdown in shipments, Apple still increased its market share to 13.6 percent, compared to 12.5 percent a year earlier. Impressively, the results do not include shipments for the highly successful iPad.

Apple’s bread and butter comes from its popular iPhone and iPad product line, along with the allure of its ecosystem. The tech giant avoiding the sharp decline in PC shipments can be contributed to Apple capturing its customers through other products, and at a relatively young age. Piper Jaffray recently conducted its semi-annual survey of iPhone popularity among teenagers. Of the 7,700 U.S. teens surveyed, 40 percent of respondents said they own an iPhone, compared to 34 percent just six months ago, and 23 percent in Fall 2011. Furthermore, 62 percent are looking to buy one as their next phone. In comparison, 22 percent of teens plan to purchase an Android (NASDAQ:GOOG) device.

The results were also impressive for iPad ownership. The survey finds that 44 percent of teens currently own a tablet computer, compared to 34 percent in Spring 2012. Of the teens that own a tablet, a whopping 72 percent had a version of the iPad, up two percent from Spring. As for the students that plan to purchase their first tablet in the next six months, 74 percent said they intend to buy an iPad.

Analyst Gene Munter notes, “Overall, we expect Apple devices to continue to expand in teen ownership and believe that the company is set up well to benefit from loyalty among its younger user base.” He also adds, “The smaller iPad appears to be an attractive option for teens as 43 percent of teens planning on buying a tablet said they would be more likely to do so if Apple released a smaller iPad at $299.”

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