Market share a mixed blessing for PC makers

When a tiny recovery in the PC market was reported by global consulting firm International Data Corporation at the end of last year, it was a mixed blessing for computer makers. While it reported that sales in the fourth quarter of 2017 had increased a minuscule 0.7%, it also showed a decline for the full year of 0.2%.

“This makes 2017 the most stable year the market has seen since 2011,” the firm said at the time. It meant, however, that the few companies that did see PC sales growth would have been offset by many others that saw declines. HP, Lenovo, Dell and Apple all grew market share, while sales fell for Asus and Acer.

Acer, however, moved from sixth place into fifth place for the full year, overtaking Asus. Ironically, its rise came precisely because it did not chase overall market share. Instead, it focused intensively on its two areas of strength, namely, the gaming and educational markets.

At its annual global press conference in New York this week, Acer lifted the lid on its seemingly counterintuitive strategy.

“The reality is that time spent on PCs is shrinking and has been shrinking for eight years,” said Acer’s Emmanuel Fromont, who oversees 25 regional markets in Europe, the Middle East and Africa.

“Globally, you only see a decrease. We decided on a strategy to pick areas where we can lead and win. We’re very focused on education and gaming, and on very thin and light design.

“In the rest of market we’re still a strong player, at No 5, but it’s a very commoditised market. We have a few picks and we stay focused on those.”

The area where Acer has made the most dramatic impact has been in the highly niched market for Chromebooks: low-cost laptops running Google’s Chrome operating system. Here, its global market share is above 30%, compared to its overall 6.8% share. In the gaming market, its share for the first quarter of this year was around 18%.

These numbers tell a very different story from the overall statistics: they emphasise that overall market share may well deliver bragging rights, but can also pose challenges for manufacturers who chase volume at the expense of margins.

Jerry Kao, president of IT products at Acer, told Business Times that he believed the consumer PC segment “is in trouble”.

While some segments are growing, and commercial computing remains firm, chasing overall market share was dangerous. However, the very fact that growth could be found if the focus was correct emphasised a truth that has tended to evade analysts, he said.

“The PCwill not die . . . When people demand applications or content, you need performance to handle that demand. No matter how strong a smartphone, the PC will always be stronger because the space for applications and content is greater. It may not grow, but it won’t die.”

To reassert its claims, Acer used the event to launch the most powerful Chromebook in the world, a 13-inch laptop called the Spin

13. Clearly, there is strength lurking in the niches.

The most dramatic impact has been in the market for Chromebooks