Lenovo knocks HP from top of global PC market: Gartner

SAN FRANCISCO/HONG KONG (Reuters) - China's Lenovo Group Ltd edged out Silicon Valley icon Hewlett-Packard Co to become the world's No. 1 PC maker in the third quarter, according to data released by research house Gartner on Wednesday.

A rival to Gartner, IDC, still ranks HP in the lead - but by less than half a percentage point - in terms of PC shipments worldwide. Both studies reinforce HP's struggles against rivals as new chief executive Meg Whitman tries to overhaul the stalled 73-year-old company.

Worldwide shipments of personal computers fell over 8 percent in the third quarter to 87.5 million, the steepest decline since 2001, Gartner analysts said.

PC demand growth has crumbled over the past year as more consumers flock to ultra-portable and increasingly powerful tablets and smartphones for basic computing.

"It's quite a tough year for PC makers because (Microsoft's) Windows 8 is not launched yet and some consumers are waiting for that. Cannibalisation of tablet PCs is also another factor," said Eve Jung, an analyst with Nomura Securities in Taipei.

Both sets of data show that Lenovo, Taiwan's Acer and other Asian PC makers are taking share away from U.S. competitors HP and Dell, which held on to the No. 3 spot in the quarter.

Lenovo, which has a market value of $8.2 billion, said it believed there was room for continued growth in the sector...

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Gartner: Lenovo Now 2nd-Largest Worldwide PC Vendor

Lenovo is now the second-largest PC vendor in the worldwide market for the first time.

ZoomWednesday Gartner Research said that worldwide PC shipments actually grew 3.2-percent in the third quarter of 2011 compared to the same quarter in 2010, totaling 91.8 million units. However Gartner also said that the numbers are actually lower than its earlier projection of a 5.1-percent growth during Q3 2011.

"The inventory buildup, which slowed growth the last four quarters, mostly cleared out during the third quarter of this year; however, the PC industry has been performing below normal seasonality," said Mikako Kitagawa, principal analyst at Gartner. "As expected, back-to-school PC sales were disappointing in mature markets, confirming that the consumer PC market continues to be weak. The popularity of non-PC devices, including media tablets, such as the iPad and smartphones, took consumers' spending away from PCs."

Ouch. Yet despite all the talk about spinning off its PC division, Gartner points out that HP actually grew faster than the industry standard in the third quarter, and still reigns as the #1 worldwide PC vendor shipping over 16 million units, a 5.3-percent jump from the numbers seen in the same quarter last year. It's current market share hovers at 17.7-percent, just over 4-percent more than the new #2 PC vendor, Lenovo.

"Lenovo became the second-largest PC vendor in the worldwide market for the first time," Gartner said. "The company's expansion was boosted in part by the joint vendor with NEC in Japan. However, its aggressive marketing to both the professional and consumer PC markets accelerated its shipment volume."

According to the report, Lenovo shipped more than 12 million units in the third quarter and currently commands 13.5-percent of the market. The company has actually enjoyed a growth of 25.2-percent compared to the sub-10 million units and 11.1-percent market share seen in Q3 2010. Dell reportedly controlled 12.2-percent of the market during the same 2010 quarter, but didn't share the same growth into 2011.

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Lenovo chairman talks economics, future of PCs

Liu Chuanzhi's name may not be instantly recognizable in the U.S., but at home in China he's a technology and business celebrity.

Chuanzhi helped found Lenovo in 1984 with a group of 10 engineers in China at a time when the country was in transition. Moving from a planned economy to a market economy was hard enough, but Chuanzhi and colleagues also had to compete with Western companies attempting to insert themselves in the Chinese marketplace. After purchasing IBM's PC business in 2004, Lenovo has today grown to the fourth-largest provider of PCs in the world, behind Hewlett-Packard, Dell, and Acer.

As chairman of Lenovo, Chuanzhi doesn't come to the U.S. often. But during a rare trip to San Francisco late last week, CNET got the chance to sit down with him. We spoke shortly after his company delivered a promising earnings report, but the topics ranged from Lenovo's efforts to grow its brand outside of China, to what happens to the personal computer in the "post-PC era."

Here's an edited portion of our interview (we spoke through an interpreter).

On why Lenovo keeps outgrowing the PC market overall:
"At the outbreak of the financial crisis, Lenovo's main sales and profits were all based in China, so when the Chinese economy took a downturn, Lenovo's performance took a very big hit. Over the last couple years a lot of attention has been paid to achieving more balanced growth, geographical balance both inside and outside of China, also (balance between) sales to enterprise versus sales to consumers. That's why we've been able to maintain very steady growth.

"Deciding on this correct strategy was not a fluke--it was the result of senior management having repeated discussions and analysis of what the trends would be."

Why the "post-PC era" is a good thing in the long run:
"Several years ago Lenovo realized that mobile broadband was on the horizon and we were working on integrating that into PCs. Then last year we introduced the LePhone (smartphone) and we're about to introduce tablets. We brought out a product at CES, the U1, that you put your slate into the laptop, that was quite favorably received at CES.

"We find it rather exciting in this new era we're going into that it marks the end of the 'Wintel' monopoly. It offers more room for innovation and choice of OS and CPUs. I think there will be more types of platforms. Right now, I think (the combination of Windows and Intel chips are) still the best choice for enterprise machines, but I think gradually the distinctions between consumer and enterprise machines will also change."

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Lenovo's Windows Slate Tablet is U.S Bound, Hands On

Lenovo launches its first Slate Tablet for U.S customers, and we got a thorough hands-on.

Las Vegas—Those who were disappointed about the Lenovo U1 Hybrid and LePad tablet being only available in Asia shouldn't pout—Lenovo is prepping a slate for U.S customers and showed it off at CES 2011. Rather than wait for Google's Android Honeycomb OS, which it'll have at some point, the Ideapad Windows Slate will run on Windows 7 and an Intel Atom processor. Surprisingly, it worked quite well for an unfinished product.

Lenovo doesn't have an official name for the slate yet, so we'll just refer to it as the Ideapad Slate for now. It's about as heavy as the LePad, both of which have 10-inch screens and resting either one on my forearm wasn't too burdensome (Lenovo had the LePad on display as well). It's slightly thicker than my second gen Apple iPhone 3G and is well made despite its plastic construction. The back of the slate can be customized with different colors; the ones that were on display were orange and white.

Boot up times were impressive, at least more so than your typical Windows PC. Lenovo touts that proprietary software, combined with the 32GB local SSD, enabled quicker boot up times. Lenovo realized that the Windows user interface alone wasn't going to be enough: A more touch-friendly one was in order, so it borrowed the multi-viewing pane concept from the LePad. In this case, big, touch-friendly icons are divided into two viewing panes: One for "Work", the other for "Play". 

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