Despite a sinking PC market, HP and Lenovo are rising high in PC sales.
Both companies this week reported quarterly financial results that included strong sales of PCs.
The results are somewhat surprising, given the dire state of the global PC market. Market watcher IDC says worldwide PC shipments in the first quarter of this year fell from the year-earlier quarter by 3%.
However, IDC also points out that one area of the PC business was surprisingly resilient. That area: business desktops.
The driver for these sales? Businesses need to get all their desktop users onto Windows 10 before this coming January.
That’s when Microsoft plans to end support for Windows 7. The older OS still runs on nearly 40% of all desktops worldwide, according to NetMarketShare. That adds up to a lot of PCs in need of a refresh.
That scenario is certainly playing out at HP. In the company’s most recent fiscal quarter, sales for its Personal Systems group rose 1.8% to $8.92 billion.
However, notebook sales in HP's second fiscal quarter actually fell by 1%, while units shipped declined 5%.
The growth came instead from desktops. Sale of these HP devices increased 7% in the quarter, while unit shipments increased 6%. That one-point spread also indicates that HP is enjoying a higher average sale price, getting more dollars from each system it sells.
To be fair, notebooks still dominate HP’s overall PC sales. For the second quarter, notebook sales represented 57% of the Personal Systems group’s revenue. Desktops accounted for just 33% of sales, while workstations and other devise accounted for 10%.
Over at Lenovo, the company is celebrating record high revenue for its PC and Smart Devices group. For the full fiscal year ended March 31, the group’s revenue totaled $38.47 billion, a year-on-year increase of 14%.
That also helped Lenovo attain the market-leading position for the first time in Canada. Lenovo says its share of the Canadian PC market is now 21%. That’s thanks to its commercial business in Canada growing 29% and its consumer business growing 56%.
In so doing, HP and Lenovo join Microsoft, which recently reported quarterly sales of its Surface PCs rising 21%.
These suppliers are pulling off a neat trick, watching their boats rise even as the overall PC tide falls.