Hewlett Packard Co. (HPQ) probably sacrificed profit margin to win market share in the fourth quarter, when it retook its spot as the top personal-computer maker from Lenovo Group Ltd. (992), Gartner Inc. (IT) said.
While Lenovo’s sales growth of 8.2 percent from a year earlier was the fastest of the top five computer makers, Hewlett Packard’s dominance in professional PCs helped it retake top spot, market researcher Gartner said in a report yesterday. Hewlett-Packard shipped 16.2 percent of PCs last quarter compared with 15.5 percent a year earlier.
Meg Whitman, Palo Alto, California-based Hewlett-Packard’s fourth chief executive officer in two-and-a-half years, is fighting to reverse declines as customers eschew computers for tablets and smartphones. Globally, PC shipments dropped 4.9 percent in the fourth quarter from a year earlier to 90.4 million units.
“Tablets have dramatically changed the device landscape for PCs, not so much by cannibalizing PC sales, but by causing PC users to shift consumption to tablets rather than replacing older PCs,” Mikako Kitagawa, an analyst at Gartner, said in the report. “This transformation was triggered by the availability of low-cost tablets in 2012.”
Hewlett-Packard’s adjusted earnings per share will probably drop to $3.30 for the fiscal year ending Oct. 31 from $4.05 a year earlier, according to the average of analyst estimates compiled by Bloomberg. The company is considering the sale of underperforming units as it works to mitigate the effects of botched acquisitions and declining revenue.
The PC-maker rose 4.9 percent to close at $16.95 in New York trading yesterday.
Lenovo’s PC market share grew to 15.5 percent in the fourth quarter from 13.6 percent a year earlier, Gartner said. The Beijing-based company outsold Hewlett-Packard in three months ended September, breaking its competitor’s six-year reign as top PC maker. It held the lead for one quarter.
“We remain confident that our strategy, products and business momentum will ultimately enable us to achieve clear leadership in the PC space,” Jeffrey Shafer, a Lenovo spokesman, said in an e-mail. “We continue to gain share and steadily improve overall profitability.”
Shipments in Europe, the Middle East and Africa took the biggest hit, falling 9.6 percent last quarter to 28.1 million units, the second consecutive decline, Gartner said. In those markets, Lenovo was the only one of the top five computer makers to report growth, increasing shipments by 29.4 percent from a year earlier.
In the U.S., shipments fell 2.1 percent to 17.5 million units. Apple Inc. (AAPL), Lenovo and Hewlett-Packard reported growth while Dell, the No. 2 U.S. computer maker, and Acer Group declined.
To contact the reporter on this story: Amy Thomson in London at email@example.com