And it’s that time of the, eh, quarter again. The third quarter of 2009 has ended, so IDC and Gartner both published their figures on marketshare and sales. The big news is that Acer has surpassed Dell and is now the number two PC manufacturer in the world.
Good news for the industry is that PC shipments were up 2% year over year, even though the third quarter of 2008 was a strong one, according to Gartner. “These are good results especially given that PC shipments for the third quarter of 2009 are being compared to a very strong third quarter from 2008,” says Mikako Kitagawa, principal analyst at Gartner, “Sequentially, third quarter shipments grew 18 per cent, which is higher than the historical seasonal growth from the second to third quarter.”
Even though unit shipments are up, it’s a silver cloud with a black lining: average selling prices of computers are dropping, meaning margins are getting thinner. On top of that comes the ever rising popularity of netbooks, which only adds a lot of insult to injury. “Ongoing price declines continue to be a major issue in the PC industry,” Kitagawa says, “PC vendor performance cannot be determined solely by unit market share gains as related revenues and margin performance are key to surviving in very competitive market.”
The market share figures from both research firms look like this:
As you can see, Acer has overtaken Dell as the number two PC maker in the world, which is something people had long seen coming. Acer has been doing very well with, among other things, its line of Aspire One netbooks. Apple is not present at all in the worldwide top 5 of PC makers; the Cupertino company needs to nearly double its worldwide sales to enter the top 5.
why these stories always paint netbooks as poor margin sales. That is what they used to say about desktops. And if netbooks made so little money, why keep making them. Why! because they do make money. These analysts are comparing todays prices with the greed of the 80s. Back then PCs cost more than high end refrigerators.
I happen to own an Aspire One and love it. It does what I need.
Margins are not profit. You can make money with low margin products. However you will need to sell a lot of units.
Back in the mainframe days a company who sells a mainframe could get 50% margins on their mainframe so they can sell a small volume and make a lot of money. However if you selling PC’s and you have 5% margins on them. then you will need to sell a lot more taking more effort.
So say 1 Mainframe cost 1 Million to the customer. The company makes 500k
To do this for a $1000 PC you get $50 in margins so you will need to sell 10000 units. And selling that many units is much harder as you will need to sell $10,000,000 of product vs. $1 million. So you need to work 10x as much to make the same money
Don’t forget the support costs. More units means more users having problems, calling in to get help. High-volume mass-produced often cut corners in production, making the probability of failure higher. And that probability of failure applies to more units, making the number of failures vastly higher than the low-volume counterparts.
Sell 100,000 units at $50 margin, and you make $5 million, which you can quicky lose to tech support salaries and warranty replacements.
It’s called the race to the bottom.
Its why companies who own their own platform are growing in unit share as well as in profit while everybody else is growing in unit share and shrinking in profit or are declaring losses.
yep. my acer computer died after a year, i was pretty disappointed.. my Dell has already lasted about a year, and it just seems much better made overall. and the design of it is very cool. plus the dell came with all the software.
Market share is still two words, Thom.
As an Acer laptop owner I must say is not a surprice. Acer laptops are cheap and the quality is acceptable if not amazing.
Also I own a Sony vaio latop, can’t tell much of the difference betwen the two, except for the keyboard where the vaio feels more smooth.
I can’t speak for the Acer Travelmate series, but every Aspire I’ve ever had the displeasure to have to fix has had a myriad of build quality issues and dirt cheap, corner-cutting components inside. I thought Dell’s were bad, but the Aspire series is worse than any Dell I’ve ever seen. None in recent memory are as bad as the Aspire 5100, but they come close.
I have owned two acer laptops and while the actual build was okay, there were numerous problems with things like buggy ACPI problems on all operating systems that weren’t windows, not to mention that half the functions keys worked via software and not hardware.
My Dell D420 which I got for about £300 (second hand mind you), has far better build quality, and runs every Operating I could throw at it with zero problems and all the function keys are hardware and didn’t require me to install “acer button manager” software.
You have to wonder what happens in the next quarter as there may be incentives to buy from one company or the other.
I wonder how the failure rates coincide with market share. As they build/sell more machines, are there increased failures? I see a lot of HP/Compaq and Acer/Gateway/eMachines refurbished machines for sale and not so many from the others.
Still Dell isn’t dead but the people who ran Gateway (into the ground) must be quite pleased at the change.
Hey, I bought an Acer laptop last month. Maybe I put them over the top!
If you lived in Greece you’d certainly understand why Apple’s worldwide market share is different from the US’s. I don’t know what is going on in countries that have an official Apple presence, but here everything but the actual products is terrible. Support is non existent and you have to wait for a month if you want a Mac Pro with a slightly different configuration than the default. And don’t get me started about the price difference between here and the US.
Just to understand how bad the situation is, the largest reseller of the largest city of Greece (that has half the country’s population), got 20 copies of Snow Leopard. And that’s for the whole chain, not a specific retailer. I was this close to pirating it