Monday, January 25, 2021

Lenovo outstrips other OEMs, dominates global PC shipments - ITREALMS

Sponsored@ITREALMS ... making leadership SENSE with digital news! 

The global Original Equipment Manufacturer (OEM) Lenovo, has continued to astound market watchers, dominating worldwide PC shipments on the back of a rise in demand. 

The demand is fueled by the COVID-19 pandemic which has seen more schools and students embracing online learning. Also, with more companies and corporate organisations the world over still asking their employees to work remotely, the demand for personal computers (PCs) has soared in recent months.


Preliminary data by research firm Gartner reveals that worldwide PC shipments totaled 71.4 million units in Q3 2020, a 3.6% increase from the third quarter of 2019. According to Gartner, the huge leap in demand can be attributed to a rise in consumer demand for PCs due to home entertainment and distance learning needs during the coronavirus pandemic, aided by arguably the strongest growth in the US PC market in over 10 years.

China-based Lenovo continues to dominate the PC market, with its quarterly shipments rising to over 18 million units for the first time ever, according to data from Gartner. Lenovo is closely followed by HP and Dell. Also ranked among the top sellers are Apple, Acer Group, and ASUS.

Although Lenovo experienced a slight decline in desktop shipments, Gartner explains that demand for Lenovo desktops still fared better than those of HP and Dell, aided by solid growth in China. Also, research shows that HP experienced significant decline as desktop shipments declined 30% year over year, resulting in a growth of just 0.7% in the third quarter of 2020. In addition, Dell’s streak of 17 consecutive quarters of year over year growth ended in Q3 2020 with a 4.6% decline. Gartner notes that this development reflects its emphasis on business over consumer PCs.

Equally important, Lenovo witnessed a 90% year-on-year increase in Chromebooks shipment in Q3 2020. However, the firm does not include the device in its traditional PC results. However, if it includes Chromebooks in its calculations, the total worldwide PC market can be said to have grown around 9% year over year, with Chromebooks representing about 11% of the combined PC/Chromebook market.

“The quarter (Q3’20) had the strongest consumer PC demand that Gartner has seen in five years,” Mikako Kitagawa, research director at Gartner, said. “The market is no longer being measured in the number of PCs per household; rather, the dynamics have shifted to account for one PC per person. While PC supply chain disruptions tied to the COVID-19 pandemic have been largely resolved, this quarter saw shortages of key components, such as panels, as a result of this high consumer demand.

“The business PC market had a more cautious dynamic... Businesses have continued to buy PCs for remote work, but the focus has shifted from urgent device procurement towards cost optimization. However, enterprise spending remained strong where government funding for distance learning and remote work has fueled device purchases, such as in the U.S. and Japan.”

Meanwhile, data shows that the Europe, Middle East and Africa (EMEA) PC market remained relatively flat in the third quarter of 2020, with just 0.4% year over year growth to 19.5 million units. Also, the EMEA market witnessed strong consumer demand for PC. In Africa, for instance, this manifested in aggressive sales of notebooks for children and students and high-end gaming machines to support the entertainment needs of families.

Josh Yang-Ki, a global research analyst based in South Africa says Lenovo is doing extremely well, even with all the difficulties in global capacity to meet demands. He noted that the brand is doing well in SA as well as in other African countries in the last five years, even as he described Lenovo as a leading source of PCs and other digital devices.

‘‘Lenovo has sustained leadership among other global brands in Africa. This can be attributed to their uncompromising stance on quality and cutting-edge technology. It may be difficult to beat Lenovo in the global PC supply chain as they are spending a lot of money to sustain the tempo. Other OEMs are trailing behind and may need to step up their strategy in attacking the marketplace,’’ he stated.

However, compared to other regional markets, Africa has suffered more in the supply chain disruption caused by the COVID-19 pandemic. This can be traced to the lack of foresight in envisaging the demand glut occasioned by the onset of the pandemic, with the region taken unawares and left reeling from the fact that it had traditionally worked with lower orders when compared to other regions, owing to lean budgets.

With schools shut in dire need of e-learning options and businesses having to keep their staff working from home, Africa had belatedly woken up in the third quarter of 2020 and witnessed a rise in demand for PCs. By then, the world was already in the grip of a global scarcity – a worrisome situation in which those who could pay were unable to find options.

Prices had also skyrocketed, with many major dealers cashing in on the situation to take a pound of flesh for the few available units.

‘‘A number of greedy distributors and marketers had capitalized on the situation to extort consumers,’’ says Yang-Ki. ‘‘Thus, African consumers had been more harshly affected by the supply chain disruptions.’’

In Nigeria, Africa’s biggest market, the situation was hardly different.

With the shutdown, the nation’s education sector was virtually grounded. The majority of tertiary institutions had limited resources to move their classes online, teachers in primary and secondary schools were mainly analogue and required re-training, while about 90 per cent of students also lacked access. Worse still, the Federal Government was also handicapped, with dwindling resources from oil – the mainstay of the Nigerian economy – hampering its ability to intervene as prices of PCs rose sharply in the marketplace.

As Nigeria adjusted to the reality that the coronavirus pandemic would be around for a while, educational institutions, businesses and other users made an effort to rise to the occasion but had to contend with the existing global scarcity and crazy prices.

Konga, Nigeria’s biggest supplier of PCs, laptops and other digital devices had gone some way in filling the gap, making devices available without profiteering, unlike the case with other marketers – a development that the management of the e-Commerce giant had been widely applauded for.

Giving an insight into the actual data of PCs and laptops which Konga is selling by virtue of its position as the market leader, Vice President, Konga Bulk, Mr. K. Johnson, disclosed that the figure, which had always been huge, has recently taken a bashing. Specifically, he lamented the supply chain disruption which had made it harder to meet surging demands.

‘‘Now, when we place an order for 100,000 units, we barely receive about 15,000 in two or three months. But due to our commitment to major OEMs, we have enjoyed their support to fill the gap and assuage the needs of those embracing online learning and many in the corporate market who are working from home. At Konga, there is an internal resolution by Executive Management and it is part of our CSR – not to profiteer in this period of scarcity

‘‘But we hope things will improve soon, as the scarcity of components and other hardware reduces.’’

Further, he hailed the partner OEMs, even as he singled out Lenovo for special praise.

‘‘We have enjoyed huge support from Lenovo, more than any other. This has gone a long way in helping us aid students who are relying on e-learning and employees working from home, despite the harsh scarcity. Other OEMs such as HP who are our long-term partners, Dell and others have also been very supportive but the components issue remains a challenge.’’

On when Africa can expect the current scarcity to abate, Johnson says it is hard to tell.

‘‘Orders placed since August 2020 are yet to be serviced and OEMs are giving delivery dates of March to July 2021. It’s that bad but we are hopeful that things may look up soon,’’ he disclosed.

No comments: