12 Jan MarketWatch First Take: HP reclaims top spot in PCs, but staying there isn’t the top priority
While being interviewed by MarketWatch at CES, the head of HP Inc.’s personal-computer business learned that the company had reclaimed its spot as the top seller of personal computers for the first time in five years.
“The whole idea that the category is declining is false,” Coughlin said in a behind-the-scenes chat at the sprawling tech show in Las Vegas. But he quickly added that market share has never been an objective at HP. “Share is an outgrowth of us executing on our strategy.”
HP’s clinch of the turbulent global PC market was reported in data issued by two market research firms, IDC and Gartner, which both said HP was the no. 1 PC manufacturer worldwide in 2017. The company lost that title to Lenovo Group Ltd. 0992, +0.22% in 2013, but finally reclaimed it back from its Chinese rival last year as the company’s unit sales and revenue increased.
In this tougher market, HP HPQ, +1.63% has been executing better than most companies in the past year. It managed to claim the No. 1 slot while Lenovo struggled with losses amid the recent price spike in memory chips. Coughlin’s comments to MarketWatch, though, also indicated that the company does not intend to get into a price war with its rival that is nipping at its heels just to maintain its spot on top.
“I will not commit to holding on to No. 1 because people can do stupid stuff like price low or do dumb acquisitions and ventures that don’t make business sense,” Coughlin said. “We’re not saying we’re going to be No. 1 in perpetuity. … Our job is to provide customer value in our products and shareholder value as a result of doing so.”
Since HP separated from the corporate-focused HP Enterprise Co. HPE, +1.71% in 2015, its restructured and refocused business has fared better than its sister company, including a rebound in its core printing business. The company also appears to be handling the memory-price hike better than its rivals.
HP needs to continue to innovate to stay in this lofty position. Some products the company showed at CES included thin and light notebooks, with the addition of systems based on chips from Qualcomm Inc. QCOM, +0.26% QCOM, +0.26% Those systems could prove to be hot sellers if some buyers decide to look for alternatives to Intel-based PCs after the news of security vulnerabilities in Intel-based systems, as well as AMD and ARM-based chips. They also updated their Sprout system, aimed at high-end professional users, and introduced an interesting desktop tower enclosed in a smart speaker that uses Amazon.com Inc.’s AMZN, +1.78% Alexa voice assistant.
The data from the two firms differed slightly because Gartner excludes Chromebooks from its numbers. Gartner noted that Lenovo lost share in North America and HP’s unit shipments grew 6.6% in the fourth quarter, while Lenovo’s fell 0.7%. Because of their different methods, IDC said the overall PC business grew 2% in the fourth quarter, typically the biggest for the industry of the year, while Gartner said worldwide shipments fell 2%.
“The fourth-quarter results confirmed again that PCs are no longer popular holiday gift items,” said Mikako Kitagawa, a Gartner analyst, in a statement. “This does not mean that PCs will disappear from households. Rather, the PC will become a more specialized, purpose-driven device.”
Coughlin said HP, which sells Chromebooks, relies on IDC numbers instead of Gartner’s, and noted the overall growth of the category in IDC’s numbers for the past year, and celebrated his own company’s ability to grow at an even faster pace.
“Through many issues, including commodity issues, we’ve been able to power through,” Coughlin said.
MarketWatch staff writers Jeremy C. Owens and Emily Bary contributed to this article from CES.