Too bad, America - the PC market is moving to Asia

Four of the world’s six biggest PC manufacturers are now Asian companies, with Acer and Asus representing Taiwan, Lenovo from China, and Toshiba from Japan. Hewlett-Packard still tops the list by number of units sold, and Dell is either second or third. However, both could be overtaken, on current trends.

On Gartner’s numbers for this year’s second quarter, the PC industry grew by 20.7% to 82.9m units, but HP’s shipments only grew by 12.3% to 14.5m units. By contrast, second-place Acer grew by 31.6% to 10.8m units, Lenovo by 47.2% to 8.3m units, and Asus by an impressive 78.5% to 4.3m units. Even Toshiba, which has been selling laptops for 25 years, grew its unit shipments by 27.5% to 4.2m units.

Rival IDC reckons the PC industry grew by 22.4% to 81.5m units, with HP growing by 12.2% to 14.8m units, and Acer by 20.8% to 10.2m units. IDC puts Dell ahead of Acer, and Asus (83.6% growth) fractionally behind Toshiba, but the numbers are very similar.

Don’t expect this to change. One of the reasons for the swing is that the US just isn’t that important any more. It used to represent over half the PC market, and on Gartner’s numbers, that has fallen to 21.6%. Indeed, I expect at least one PC manufacturer will become bigger than the whole US PC market in the next decade. In the latest Q2, HP shipped 14.5m-14.8m PCs, while the US total was 17.9m (Gartner) or 18.4m (IDC) units.

In the Asia Pacific region, PC shipments grew by 25.4% to 27.8m units, on Gartner’s numbers, and it’s going to keep growing as people become better off. I think Asian manufacturers will probably do better at meeting their needs than American ones.

In fact, neither Gartner nor IDC publicly breaks out the numbers for the two markets that will matter most over the coming decade. The first is Eastern Europe, where many homes and small businesses are probably still buying their first PCs. Gartner says “Central / Eastern Europe remained the fastest growing regions sequentially followed by Western Europe and the Middle East and Africa.”

The other important market isn’t a geographic region but BRIC, made up of the four developing giants: Brazil, Russia, India and China. Together, those have a population approaching 3 billion, which is ten times bigger than the US’s 300 million. Of course, as individuals they don’t have the same sort of disposable income as Americans, at the moment. However, China already has more internet users than any other country (more than 350m) and more mobile phone users (634 million in 2008). China is now the world’s largest PC manufacturer, and it will soon be the biggest consumer, if it isn’t already.

Computer industry people in the west, and particularly in the US and the UK, appear to believe that the two most important things are design innovation and marketing, but that the manufacturing can be left to other people. Apple is a classic case, but this “hollowing out” process is common.

The bad news is that the Chinese are going to find it a lot easier to develop innovation and marketing skills than western countries will find it to restore their lost manufacturing industries. The Japanese did it with 120 million people. The Chinese will do it with 1.5 billion.