Canalys: PC shipments increased 18% in Q4 2013, tablets accounted for nearly 50%

Opportunities lie in Google's operating systems and commercial PCs

The global PC market grew 17.9% in the fourth quarter of 2013, driven by a seasonal surge in tablet shipments. Tablet shipments grew 65.2% year-over-year to 76.3 million units, accounting for 48.3% of the total PC market. Except for tablet shipments, shipments in all regions fell 6.9% year-over-year.

Apple remained the market leader in the PC market in the fourth quarter, shipping 30.9 million units, or 19.5% of the market. Of that total, iPad shipments accounted for 26 million units, or 84.3% of its total shipments in the fourth quarter. Apple's share of the overall tablet market rose from 27.3% to 34.1%, as the launch of the iPad Air and iPad mini with Retina displays boosted demand. The original iPad mini also saw a price cut, dropping to $299 in the U.S., making it cheaper than ever to buy an iPad. But competition is intensifying, with Android tablets dropping in price, which will put pressure on Apple's market share in 2014.
Lenovo narrowly held onto its No. 2 position in the fourth quarter, gaining 11.8 percent market share. Lenovo's PC shipments rose 25.5 percent year-over-year, driven primarily by sales outside its core market of China, where shipments declined. Lenovo's notebook shipments fell 11.7 percent in China, offset by impressive growth in other regions, particularly Europe, where shipments grew 30.4 percent. It also saw strong growth in Latin America, where it acquired CCE in the first quarter of 2012. Lenovo was an early adopter of Android as a tablet operating system, while the likes of HP and Dell were waiting for Windows 8 and prioritizing profits over market share. Lenovo's strategy is paying off not only in its home market, but also around the world. "Lenovo's notebook shipments still have growth potential worldwide, and it has become a challenger in the tablet market," said analyst James Wang. "Globally, Lenovo's tablet shipments in the fourth quarter were three times that of HP and Dell combined, and 2.5 times that of HP and Dell if China is excluded."
Samsung continued to grow strongly and held the third position, shipping 18.2 million units. Tablets accounted for 79.7% of its PC shipments in the fourth quarter, or about 14.5 million units, up 90.3% from the fourth quarter of 2012. Samsung is the undisputed second in the tablet market. The top two suppliers' combined shipments accounted for 53.2% of the overall share. But Samsung paid a price for the growth in shipments, as it had to rely on heavy promotions to reduce inventory. Most of Apple and Samsung's shipments are in established markets, around two-thirds of the European market and the United States. The two suppliers have equal shares in Latin America and Asia Pacific (excluding Greater China). "Apple is focused on China, where it has a 38.3% tablet market share, but it has not been able to achieve competitive pricing in other high-growth markets and risks missing out on future developments," said senior analyst Tim Coulling. "Product innovation and competition will continue to accelerate in the Android camp. This provides good growth potential for smaller local players, while those top suppliers are willing to disrupt the tablet profit margin."
Business demand for PCs is improving as companies brave the migration from Windows XP. But Windows 8 will not be a major beneficiary as some businesses opt for the safer option of Windows 7. This provides an opportunity for vendors with strong enterprise sales and building B2B channels in 2014. Vendors with heavy exposure to the consumer notebook market still face an uncertain future. The Windows 8 boost remains weak and the PC refresh cycle shows no signs of recovery. With Windows 9 reportedly scheduled for release in April 2015, Microsoft risks losing momentum unless its Windows business makes a dramatic turnaround. "Consumers are becoming more open to alternatives to Windows, and Google's low-cost options are paying off," said analyst Pin Chen Tang. "Android is the most popular OS in the tablet market, and PC vendors are showing strong interest in Chromebooks, which are carving out a niche, especially in education."