Hewlett‐Packard (HP) and Dell have announced divergent fortunes.
Whereas HP was hurt by plunging consumer PC sales in the most recent quarter, Dell’s 80% corporate exposure has allowed it to outdo expectations.
According to sources citing figures from research firms, this trend is positive for No. 10 ranked Singapore-based EMS provider Venture. (See Top 10 EMS / ODM)
The company has cut out most of its consumer business in favor of enterprise business which is expected to grow faster and be more resilient to cannibalization threats from the tablet phenomenon. (Read Apple iPad vs. netbooks, notebooks, smartphones)
Consumer PC sales aren’t what they used to be
In the quarter to April 2011, No. 1 PC maker HP saw its consumer PC sales plunge by 23% year-on-year and its CEO made a reference to a ‘bifurcation’ between consumer and corporate demand for PCs.
Similarly, No. 2 Dell reported a 7% drop in sales of PCs to consumers while No. 3 Acer’s PC sales volume fell by 16% in 1Q11.
Fig. 1: Top 5 vendors’ 1Q11 worldwide PC shipments
On the bright side, enterprise demand provided more upside for HP and Dell.
HP’s sales of business PCs grew by 13% while revenue from servers, storage systems and networking equipment increased by 15%.
Dell, which gets 80% of its revenue from corporate customers, also said it expects mid‐single‐digit revenue growth in its next quarter, which is slightly above its normal growth rate of 2‐3%.
Fig. 2: Worldwide commercial PC shipments (1Q08‐4Q10)
Despite concerns about tablets cannibalizing corporate demand as they have affected consumer demand, this is unlikely to happen according to the same sources.
Venture now almost exclusively focuses on enterprise‐only products after cutting out its consumer business with HP last year.
Fig. 3: Venture – segmental revenue (1Q09‐1Q11)
In recent quarters, Venture’s enterprise businesses, namely, test and measurement, retail store solutions and industrial products, have outperformed its printing and imaging and computer peripherals businesses citing the same sources.
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