Lenovo poised to surpass HP as top PC maker, say analysts

The Chinese maker could capture the top spot from HP later this year, according to information cited by Reuters.

Lenovo's ThinkPad Edge.
Lenovo's ThinkPad Edge. Lenovo

The PC market may see a new leader by the end of the year, says at least one analyst quoted by Reuters.

Currently in second place, Lenovo is set to overtake Hewlett-Packard as the top seller, making it the first Chinese vendor to grab the No. 1 spot in a key technology sector.

"It's just a matter of time before Lenovo becomes No. 1 and it won't be surprising at all if it happens later this year," Frederick Wong, executive director at Avant Capital Management (Hong Kong), told Reuters.

Lenovo stole the No. 2 spot from Dell during last year's third quarter, according to Gartner and other researchers. Since then the company has continued climbing the charts and is now hot on HP's tail.

A July 11 report from IDC pegged Lenovo's worldwide second-quarter market share at 14.9 percent, compared with HP at 15.5 percent. Gartner found an even tighter race, giving Lenovo 14.7 percent of the market and HP 14.9 percent.

But sometimes being No. 1 isn't all it's cracked up to be.

Like other computer vendors, Lenovo is stuck in a sector that's seen better times. PC shipments continue to decline , with Apple the only vendor still experiencing some growth.

And despite gains in market share, Lenovo's PC profit margins have narrowed. The company achieved only a 1.4 percent operating margin last quarter, compared with HP at 7.4 percent and Dell at 6.2 percent, Reuters noted.

Lenovo also faces challenges in the booming tablet market where it's up against Apple and a host of Android vendors, now including Google itself with the new Nexus 7.

PC demand could bounce back this year if Windows 8 spurs more sales, thereby benefiting Lenovo. But the upcoming new OS is designed for tablets as well as computers. So Lenovo may be in the same boat as other Android vendors in facing more competition from Windows tablets, Reuters added.

 

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