HP shift on PCs could boost rivals

But can Dell, Acer and Lenovo take advantage of uncertainty?

With Hewlett-Packard (HP) likely spinning off its PC manufacturing business, other major vendors will almost certainly be looking for a way to get a bigger piece of the hardware pie.

HP announced on Thursday that, among other moves, it is may sell its PC manufacturing business. That news rocked the hardware industry since HP is by far the dominant PC maker in the world.

So while HP decides just what to do, PC makers like Dell, Acer and Lenovo should be plotting their next move, say industry analysts.

Rob Enderle, an analyst with the Enderle Group, said HP's shift could easily be great news for other major vendors who want to take advantage of it. After all, companies and consumers may not be so quick to buy HP desktops or laptops if they feel the company or products are in flux.

That could mean more business for the other top vendors.

"Whoever takes over HP's PC business could, if it is successful, emerge in 18 months as very powerful. But, for those 18 months, the others will be able to gain share at HP's cost," said Enderle. "The leader is weakened until the divestiture stabilizes, and there is no certainty it will be successful. This will focus the others on HP's share."

All of these changes come just as the PC market is shifting into a slower pace.

Last month, analyst firm Gartner reported that worldwide PC shipments were only up 2.3% in the second quarter of this year compared to the same quarter in 2010. Gartner earlier had predicted that shipments in the second quarter of 2011 would grow by 6.7%.

In June, IDC, another major industry analyst firm, also lowered its projections for the global PC market.

These tough times are unlikely to change anytime soon, said Charles King, an analyst with Pund-IT Inc.

"Clearly, the past year has been a tough one in the core markets here in the U.S. and in Europe, and I expect the coming year to be similarly difficult," said King. "The same issues dragging at HP are impacting virtually every other consumer-centric IT vendor. Competitors may be able to capture some short-term business opportunities due to HP's decision, but I'd be extremely concerned about how longer term issues will affect them."

Who could benefit the most from any change-up in PC sales?

The obvious suspects are Dell, which passed Acer to take over the second-place spot in the worldwide PC market in the second quarter of this year, according to Gartner. Acer, which dropped from second place to fourth, also is looking to make up some lost ground and could see HP's shake up as an opportunity.

And of course Lenovo, which holds the third-largest market share, is riding some great momentum right now, reported Gartner. In the second quarter of 2011, the company saw 22.5% growth in its PC shipments - the largest growth rate of any of the top PC makers.

All three companies will be focused on picking up any customers that HP loses.

King noted that the PC market won't be wide open for long if HP can consummate its strategy quickly and seamlessly. "That said, the longer the situation -- and related uncertainty -- drags on, the wider open the market will be," he added.

However, Jim McGregor, an analyst with In-Stat, warned that whatever company ends up with HP's PC business is likely to be very formidable, much like Lenovo became a powerhouse after taking over IBM's hardware business.

And that means the likes of Dell, Acer and Lenovo will have to brace themselves for a full-on onslaught from a company that most likely will be totally focused on the PC business.

"It may be an opportunity for one of these companies if they can acquire those assets," said McGregor. "Otherwise, they are still likely to be facing a significant competitor that may be even more focused after a spin-off. However, the new entity would lack the IT services and infrastructure to offer package deals to businesses. This may be a competitive disadvantage to both the new entity and the remaining HP, which could be a boost for Dell, Lenovo and IBM."

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her e-mail address is sgaudin@computerworld.com.

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