HP Takes Back PC Crown From Lenovo in Second Quarter

By Rachael KingFeaturesDow Jones Newswires

HP Inc. has taken back the crown from rival Lenovo Group Ltd. as the top seller of personal computers, ending the Chinese company's four-year reign, according to data from research firm Gartner.

World-wide PC shipments overall continued their descent in the second quarter, falling 4.3% from a year earlier as shortages of certain components drove up prices and hurt sales, according to Gartner.

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But HP managed to grow its shipments faster than competitors -- rising 3.3% to 12.7 million units -- and achieve its fifth straight quarter of year-over-year growth. With 20.8% of the market, according to Gartner, HP reclaimed the top position from Lenovo, whose share moved down to 19.9%.

"Becoming number one in market share was not an explicit objective," said Ron Coughlin, president of HP Inc.'s global personal systems business. He said rather than try to gain market share at the expense of profit, HP has focused on the profitable segments of the market, such as gaming and convertible laptops.

Lenovo's shipments fell 8.4% in the quarter, suggesting the company is passing along higher component costs in the form of price increases, Gartner said in its report. Last quarter, Lenovo and HP effectively tied in market share.

A Lenovo spokesman said its PC business continues to deliver healthy profits and stable market share. The company is focusing on fast growing segments such as gaming and detachable devices, he said.

Dell Inc. remained a distant third in market share, according to Gartner, with 14.7% share, while Apple Inc. passed AsusTek Computer Inc. with a nearly 7% share.

The PC market has faced pressure in recent years as consumers have generally shifted money to smartphones and tablets, and away from desktop computers. The second quarter was the 11th straight quarter that shipments fell, according to Gartner.

A rival research firm, International Data Corp., also released data Wednesday, putting HP's shipment growth at 6.2% for a top market share of 22.8%. IDC's data differ from Gartner's in that it includes laptops called Chromebooks that run operating software from Google Inc.

It is still too early to claim certain victory for HP in the PC market, but the company started regaining market share in the second half of last year, said Gartner analyst Mikako Kitagawa. That may be a result of its investment in sales and marketing to expand the PC business, she said.

In the second quarter ended in April, HP posted 10% revenue growth in personal systems from the year-earlier period. HP's notebook computers showed the most strength with 17% growth, the biggest jump since the company's separation from Hewlett Packard Enterprise Co., five quarters ago. Workstations grew 7% during the quarter while desktops edged down 1% from the year-earlier period.

Write to Rachael King at rachael.king@wsj.com

(END) Dow Jones Newswires

July 12, 2017 19:14 ET (23:14 GMT)