Analyst: Here’s Why the Time is Ripe to Buy a PC
The slow death of personal computers has pushed sales of laptops and desktops down toward typewriter-level numbers, but this slump has naturally made it a good time to buy a new computer. “We’re seeing prices on laptops that we’d normally see on Black Friday,” DealNews.com feature writer Louis Ramirez told MarketWatch. “Laptops are cheaper right now, and desktops are just dying out.” To substantiate his point, the writer noted that computers with Microsoft’s (NASDAQ:MSFT) Windows 7 operating system are priced much higher than the latest Windows 8 devices.
In the first quarter of this year, worldwide shipments of personal computers decreased 14 percent from the year-ago quarter, according to data released by the research firm IDC this week. Of those companies still manufacturing PCs, Hewlett-Packard (NYSE:HPQ) boasts the highest sales, followed by Lenovo (LNVGY.PK) and Dell (NASDAQ:DELL). HP’s Pavilion Notebook, the company’s most popular model, is probably the best-selling PC in the world, analysts told the publication.
Despite its lead, HP’s PC shipments dropped nearly 24 percent in the first quarter, to 11.997 million and in the past year, its share of the personal computer market fell from 18 percent to 16 percent. But it is possible that HP’s decreasing market share may be linked to the changes management has made to its business. “H-P is more focused on enterprise business and is not as willing as other PC makers to compete with the magnetism of Apple’s products,” Morningstar analyst Carr Lanphier told MarketWatch. Chief Executive Officer Meg Whitman’s turnaround efforts have begun to show momentum as the company attempts to transition its traditional, lower-profit personal computer business to more lucrative software. Regarding its changing business, a spokesperson for the PC-maker only told the publication that the company remains focused “profitable growth.”
As evidenced by HP’s declining market share, analysts have claimed that the company may not be able to maintain its dominance for long. China-based Lenovo stands close behind HP in IDC’s PC-shipment rankings. According the survey, the company’s shipments remained relatively flat year-over-year, reaching 11.7 million units in the first quarter of 2013, while its market share rose to 15 percent from last year’s 13 percent. Its pricing has helped power this market share increase. “Lenovo is not afraid to lose margins for market share because it can smell blood in the water,” LaptopMag.com’s editor-in-chief Mark Spoonauer told MarketWatch. “They’re getting really aggressive on price.”
Lenovo is the only one of the top five PC manufacturers whose shipments did not fall in the first quarter. Comparatively, Dell shipments fell 11 percent, Acer’s (ACEIF.PK) dropped 31 percent, and Asustek Computer’s (AKCPF.PK) declined 19 percent, according to IDC. “Lenovo has done the best job navigating Windows 8,” Spoonauer says. “In terms of what you’re getting for your money and the ergonomics of its keyboard, Lenovo is outgunning the competition.” A Lenovo spokesman said that the Yoga and ThinkPad Twist are currently its best-selling Windows 8 devices.
For Apple (NASDAQ:AAPL), desktop and personal computer sales are still strong, despite the devices’ generally higher prices. The company’s iMac — priced at $1,200 — holds the number one position on Amazon.com’s list of bestselling desktops, while Samsung’s (SSNLF.PK) Chromebook, $250, and Apple’s MacBook Pro and MacBook Air — both priced at $1,130 — are listed as the top three best-selling laptops. “Apple will likely gain share in a declining PC market over the long term,” Morningstar analyst Brian Colello told MarketWatch. “To the extent that tablets cannibalize PCs even further, Apple Mac sales may fall, but Windows and PC makers would be much bigger losers.”
Even though IDC has reported strong shipment declines, many dealers say PC sales are robust. While tablets and mobile phones are taking share from traditional budget laptops, the popularity of desktop computers and Ultrabooks are holding steady,” TechBargains.com president Yung Trang told the publication.
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