Though its growth is still far from spectacular, the PC industry is doing a little better than expected this year.
On Thursday, research firm IDC estimated global PC shipments rose 3% annually in Q3 to 70.4 million, after having estimated 4.7% growth for Q2. Peer Gartner estimated PC shipments rose 1.1% to 68.1 million, after having estimated 1.5% Q2 growth.
Of note: IDC and Gartner calculate PC shipments a little differently. IDC includes Chromebooks within its estimates, but not detachable or standalone Windows tablets such as Microsoft's (MSFT) - Get Microsoft Corporation Report Surface devices. Gartner does the opposite. With the Chromebook market seeing strong growth, this discrepancy might be a big reason why Gartner's estimated growth rates are lower than IDC's.
One area where IDC and Gartner's numbers have much in common: They each indicate the PC industry's big 3 -- Lenovo (LNVGY) , HP Inc. (HPQ) - Get HP Inc. Report and Dell Technologies (DELL) - Get Dell Technologies Inc Class C Report -- once more gained share, as the greater economies of scale, R&D budgets and marketing budgets of these firms relative to smaller Windows OEMs kept making themselves felt.
IDC estimates Lenovo, HP and Dell respectively claimed 24.6%, 23.8% and 17.1% of PC shipments in Q3, up from 23.6%, 22.5% and 16.8% a year ago. While HP's printing woes have been a major top and bottom-line headwind, its PC business has been a relative bright spot. In August, HP reported that its Personal Systems (PC) segment saw revenue grow 3% in the company's July quarter to $9.69 billion, with a 10% increase in commercial (business) PC sales more than offsetting a 10% drop in consumer PC sales.
As was the case three months ago, both IDC and Gartner note that purchases by businesses looking to upgrade their systems before Microsoft ends its support for Windows 7 in January. IDC also once more said that sales got a boost from attempts to pull in shipments of Chinese-manufactured PCs ahead of potential tariff hikes, albeit while adding that Intel (INTC) - Get Intel Corporation Report CPU shortages made the process "a bit more difficult."
Notably, IDC also indicated that Intel shortages, which have been an issue to varying degrees for about a year, gave a lift to AMD (AMD) - Get Advanced Micro Devices, Inc. Report , which has seen strong initial demand for its third-gen Ryzen desktop CPUs. In September, reports emerged that Intel is contending with fresh shortages for notebook processors relying on its older, 14-nanometer (14nm), manufacturing process node, as it rolls out the first notebook processors to rely on its finally-launched 10nm node (they're based on a platform known as Ice Lake).
AMD, meanwhile, has been seeing shortages for its 12-core Ryzen 9 3900X desktop CPU -- they're starting to ease a bit, but haven't fully gone away -- and delayed the launch of its 16-core Ryzen 9 3950X CPU by 2 months to November. These issues come as Taiwan Semiconductor (TSM) - Get Taiwan Semiconductor Manufacturing Co. Ltd. Report reportedly sees long order lead times for its 7nm process node, which is being used to manufacture AMD's third-gen Ryzen processors.
Shortages aside, second-half PC demand is easily looking stronger than many expected at the beginning of the year. And the fact that business PC demand in particular is largely responsible for the strength is a positive for Intel and Microsoft.
Intel's CPU share within the business PC market is stronger than its share within the consumer PC market, where AMD has made bigger inroads, and its CPU average selling price (ASP) is believed to be higher for business PCs as well. Microsoft, meanwhile, obtains a higher Windows license fee on average for business PCs than it does for consumer PCs, and also on the whole sees less piracy in the business PC market.