How the 'value trap' squeezes Windows PC makers' revenues and profits
Posted in: Miscellaneous at 10/01/2014 17:03
Analysis of the revenues and profits for the 'big five' PC manufacturers - HP, Lenovo, Dell, Asus and Acer - which make more than 60% of the Windows PC - shows a multi-year squeeze on prices and profits. What next?
The news that LG is considering quitting the traditional Windows PC business isn't surprising. LG has always been a bit player in the PC market, with shipments of at best a few million PCs per year - in a market where the largest companies would expect to shift 10 times more.
As one unnamed LG employee told the Korean Times, exiting the PC business makes sense: "it doesn't make sense to put more resources into the money-losing business."
It's not just LG that's hurting. The PC business is in a slump which has seen year-on-year shipments (and so sales) of Windows PCs fall for five (imminently, six) quarters in a row, after seven quarters where they barely grew by more than 2%.