PC epicenter moving to Asia as Dell, HP regroup

Asian PC makers are growing as questions surround HP's and Dell's slumping PC business

By , IDG News Service |  Hardware

Asia is fast becoming the epicenter of the PC market as Chinese and Taiwanese companies challenge the turf occupied for more than a decade by prominent U.S. PC makers Hewlett-Packard and Dell, whose laptop and desktop shipments are stumbling.

Lenovo, Asus and Samsung are increasing PC shipments at the expense of U.S. companies even as the demand for laptops and desktops slows. Asian companies have taken advantage of low-cost manufacturing capabilities as well as proximity to the component supply chain and burgeoning markets like China to grow faster than their U.S. counterparts, industry observers said.

Demand for PCs has dropped with the emergence of tablets and smartphones, lack of innovation and flagging economies. The PC business at HP and Dell -- in first and third place, respectively, for global PC shipments -- are struggling as the companies focus on high-margin enterprise offerings. This puts Asian firms, which are developing innovative consumer products, in a better position to lead the volume PC market.

IDC is projecting annual worldwide PC shipment growth of just 2.8 percent year-over-year for 2013, and single-digit growth once again in 2014. This comes after a rough 2012 in which PC shipments fell by 3.2 percent compared to 2011. PC shipments fell for HP and Dell, which were hurt by the weak economies in the U.S. and Europe. Lenovo, Asus and Samsung bucked the trend by increasing worldwide PC shipments last year, even in the U.S. market.

Meanwhile, there are questions about the future of HP and Dell in the PC business as they try to morph into mini-IBMs with a growing enterprise product portfolio, said Jay Chou, senior research analyst at IDC. The uncertainty could cause HP and Dell customers to move to Lenovo and Asus, who are committed to consumers and PCs, Chou said.

HP in 2011 mulled getting rid of its PC business, and Lenovo is inching closer to become the world's top PC maker. Dell is already de-emphasizing the PC business, and last week announced it would go private, leaving customers with questions about the company's continued interest in desktops and laptops.

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