Interesting piece in today’s stories at The Register. Happily for me, it confirms what I’ve written about in other recent posts here for Win10.Guru — namely that the hardware refresh that is going along with business upgrades from Windows 7 to Windows 10 is good for PC sales (e.g. my July 13 item “Impending Windows 7 EOL Boosts Windows 10“). The Register piece is humorously entitled “HP Inc strips off, rolls around as Windows 10 money pours down” in what I guess is a weird homage to Scrooge McDuck. The story is short enough to be a quick read, and raises some interesting data points worth pondering.
How Do the HP Q3 Financials Show Strong Win10 Refresh Impact?
As they say: “The numbers don’t lie.” In delivering Q3 results to analysts, HP Inc — the PC and printer arm of the former Hewlett Packard Corporation — showed quarterly results up by 12 percent. Furthermore, the Personal Systems unit (home to HP branded PCs including laptops, desktops and so forth) reached sales of US$9.395B for the trailing 12-month period, also up by 12 percent. Notebooks were up by 13 percent to US$5.694B of that total, desktops by 12 percent to US$2.968B, and workstations by 11 percent to US$0.304B. Good times, apparently, all around for HP Inc’s Personal Systems product lines. [Note: some of the Register’s numbers were erroneous, so I recalculated all of them from the HP earnings report.]
HP Inc’s CEO, Dion Weisler, also credited what he called the “Windows 7 sunset” (Microsoft shows Windows 7 End of Life, or EOL, for January 14, 2020) as “a positive stimulus in the market.” Gartner agrees, according to The Register‘s story, and shows HP Inc’s PC market growth for Q2’2018 (Apr-Jun) at 6.1 percent versus overall growth for the total PC sector for that same quarter at a somewhat less thrilling 1.4 percent. That said, Lenovo and Dell grew faster than HP, and Lenovo also sold 12 million PCs more for the quarter than HP did (HP’s quarterly total number was 13.589M PCs, which puts Lenovo’s total at 25.5M PCs or thereabouts; Gartner reckons total gobal PC sales for that quarter at approximately 62.1M units).
Kind of makes me wonder: if HP, Lenovo, and Dell are all winners for Q2’2018, in a scenario for overall growth for the PC sector of only 1.4 percent, what about everybody else? Reading between the lines, I’m seeing the impact of Sony’s departure from that market, and diminishing returns for other PC players, including the Taiwanese companies (Acer, Asus, MSI, and so forth) and the remaining Japanese hold-outs (Toshiba and Fujitsu, among other, more obscure outfits). I’m a little surprised that some of the Asian powerhouses aren’t grabbing more business marketshare. I can only guess that reflects a Big Three (Lenovo, HP and Dell, that is) stranglehold on government and corporate purchasing organizations, where all the big deals get done. This, too, is an interesting insight.
What Do These Results Portend for 2019 and Beyond?
I still think that new PC sales — with Windows 10 pre-installed, or custom deployed through Microsoft’s various AutoPilot and Intune programs — are going to remain solid until perhaps one year after Windows 7 EOL. That’s simply because of the huge remaining installed base (still larger than Windows 10’s 700 million or so global user base), most of which is business or government PCs, still need to be upgraded. As long as that number stays big, so do opportunities for PC and OS sales. I don’t expect that to diminish until late 2021, though it could easily stretch out another year or two after that.
Author: Ed Tittel
Ed Tittel is a 30-plus-year computer industry veteran. He’s a Princeton and multiple University of Texas graduate who’s worked in IT since 1981 when he started his first programming job. Over the past three decades he’s also worked as a manager, technical evangelist, consultant, trainer, and an expert witness. See his professional bio for all the details.