The personal computer business is changing.� In some ways the changes are better, but in many ways the changes are not good for the sector.� Gartner Group’s Q3 preliminary data showed growth of about 7.6% on a worldwide basis in Q3-2010.� Gartner’s earlier outlook had been for 12.7% growth.� Hewlett-Packard Co. (NYSE: HPQ) and Dell Inc. (NASDAQ: DELL) have some interesting changes; Lenovo, Acer, Asus, and Toshiba all had interesting trends; and Apple Inc. (NASDAQ: AAPL) continues as the disruptive force.� The weakness in demand was soft PC sales in the U.S. and Western Europe, some we already knew if you go back to the guidance of many companies in July and August.
Hewlett-Packard Co. (NYSE: HPQ) maintained the lead with more than 15.4 million units likely shipped.� The problem is that its growth was actually in the red by about 0.5% globally despite having about 2% unit growth in the U.S.� Dell Inc. (NASDAQ: DELL) managed 9.2% global shipment growth with more than 10.8 million units expected to be shipped by Gartner, but its U.S. figures were down by -5.8% at almost 4.2� million units.� Gartner noted, “HP was impacted by consumer PC demand. Dell also had a challenging quarter.”
Gartner noted that Apple Inc. (NASDAQ: AAPL) is a part of the issue here.� The report noted that media tablet hype around devices such as the iPad has impacted consumer notebook growth by delaying some PC purchases.� While these do not replace primary PCs,� they do affect PC purchases and consumers and suppliers are taking longer as the devices are coming out.� Further noted was, “Apple had another strong quarter. Increasing traffic to Apple, associated with the iPad release (iPads are not included in Gartner’s PC shipment statistics), as well as iMac and Mac Pro refreshes, contributed to the growth.” The U.S growth for Apple was put at roughly 13.7% unit growth to more than 1.83 million units.
While Intel Corporation (NASDAQ: INTC) seems to have been kept afloat by c! orporate demand, Gartner’s Q3 data (not its Q4 outlook) indicated that the expected upturn in the professional market was slower than expected.� As far as Microsoft Corporation (NASDAQ: MSFT) and its Windows 7, Gartner believes that deployment is now expected to move into 2011. That data on Microsoft led to a trim in Microsoft’s target to $28 from $30 at Barclays this morning.
Lenovo had the strongest growth rate among the top five vendors in EMEA in the third quarter of 2010, and saw its shipments grow 61.3 percent year-on-year.� For the other makers as a whole, back-to-school PC sales in Latin America were sluggish with fewer home mobile PC shipments.� PC shipments in Japan rose more than 14% and were more than 3.6 million units in the quarter.
Much of this data is preliminary and much of the data was known.� This is also looking backwards rather than forward.� The iPad appears to be the new big disrupting technology and that trend has replaced the disruption of the netbook market from 2008 and 2009.� The big issue not tallied is ASPs: average selling prices.� As these devices get more and more centered around the lower end of the market and in a world of “good enough computing,” the average unit prices (and likely the margins) are likely to be compressing.
JON C. OGG
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