Giving the spot to a Chinese firm would certainly create some national angst. It will not just be a loss for HP but also a loss of national prestige for the U.S. as the leading tech leader.
Some groups would comment that the PC is only one of the many commodities the U.S. is producing for the world, and that we now have entered the post-PC era.
For tech experts, that’s absolutely wrong as the PC is still the world’s workhorse in getting the bulk of the work done today.
With HP’s report showing a dismal quarter, Lenovo is probably months away from taking over the leadership role in the PC market.
The American company showed a huge $8.9 billion loss for the second quarter this year, a large chunk of it coming off its IT services department. The personal system division posted a 10 percent decline in revenue, which can become a crucial reason for Lenovo’s rise to take the crown.
A report from Gartner released last month revealed that HP is holding a 14.9 percent of the world’s PC market while Lenovo has 14.7 percent. The report also mentioned a troubling fact–that while Lenovo’s share increased by about 15 percent, HP’s own declined by more than 12 percent.
A Framingham, Massachusetts firm named IDC showed a little wiggle room for HP as it leads the race with 15.5 total worldwide PC sales compared to Lenovo’s 14.9 percent.
However, the report still does not change the fact that Lenovo is close snatching the world’s title as the leader in PC sales.
Lenovo is slowly becoming a favorite brand around the world, especially in the Asia-Pacific region.
HP’s woes in its PC-making venture is not new. HP’s former CEO Leo Apotheker even considered getting away with the PC division, which was the main reason why he was booted off the company. His replacement, Meg Whitman declared that the PC division should be maintained, saying that it’s vital to the brand of the company as a whole, including its supply chain. Whitman’s idea is in line with HP’s rival as Michael Dell said that he is not selling his company and even declared that the number of PCs around the world will hit from 1.5 billion to 2 billion in a few years time.
Lenovo’s fast rise was due to its acquisition of IBM PC department in 2005, making it an overnight third largest PC vendor in the world. If Dell and HP misfortunes will continue, experts from Wall Street predicts that Lenovo will most likely be the buyer of the said companies. Lenovo’s main focus is on the PC and mobile market. It has so far proved itself as a very capable vendor, especially in the fast growing Chinese market.
While a possible spin-off talk is circulation in Wall Street, analysts are pessimistic that HP’s PC business will be taken over by domestic companies. If Lenovo will not acquire HP or even Dell, analysts predict other overseas firms may.
Oracle was a strong contender before but it’s continuing struggle to get Sun Microsystems while Microsoft is not likely to enter the PC market, threatening its dominance in the operating systems market.