US PC maker Dell loses market share in China amid economic headwinds, supply chain shift
- Dell’s share in China’s PC market shrank to 8 per cent in the quarter, at fourth spot, compared to 14 per cent in the same period last year
- Apple, the fifth biggest computer supplier in China in the second quarter, is reportedly exploring manufacturing some MacBooks in Thailand
In the second quarter, Dell’s shipments of desktops and notebooks in China plunged 52 per cent to 804,000 units, according to a report by research firm Canalys released on Tuesday. Dell’s share in China’s PC market shrank to 8 per cent in the quarter, at fourth spot, compared to 14 per cent in the same period last year.
The PC maker’s setback in the June quarter followed a 45 per cent decline in shipments in the first three months of 2023, Canalys data showed.
Dell’s plunge came amid an overall slump in China’s PC market, which declined 19 per cent in the second quarter due to more cautious spending from the commercial sector amid a slower economic recovery, according to the report.
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“Micro, small and medium enterprises are very sensitive to macro challenges, and they comprise a large portion of Dell’s commercial shipments,” Canalys analyst Emma Xu said on Thursday.
“These companies are dealing with bottlenecks in their own businesses under the current economic environment, and it’s unlikely for them to make a large-scale purchase of the devices at the moment,” Xu added.
Dell’s shrinking share in China also comes after the company’s reported plan to shift its supply chain away from the country amid escalating tensions between Beijing and Washington.
Dell, which has been present in China for over 25 years, has decided to stop buying China-made semiconductors by 2024 and may move about 50 per cent of its production out of the country by 2025, according to Nikkei Asia and Taiwan media reports in January.
Michael Dell, founder and chief executive of the computer maker, said the company’s customers were asking it to diversify its supply chain, according to a report by the Financial Times in April.
While Dell has not officially confirmed its China supply chain plans, Xu noted that other tech companies and industries are increasingly adopting a diversification strategy, but will not abandon China’s manufacturing capabilities.
“Diversification is a must for PC makers around the world, but they will still value China as a supply chain base and a market,” Xu said.
HP says it is committed to China as it makes plans to build elsewhere
Apple was just behind Dell, with a 7 per cent share in the China PC market in the period, according to the Canalys report. It was the fastest growing player among the top five vendors, with a 17 per cent growth in shipments in the quarter.
The market in China was led by Lenovo, also the world’s biggest PC manufacturer, which saw shipments slump 24 per cent in the second quarter. With a 36 per cent share of the China market, Lenovo was far ahead of its next rival, HP with 10 per cent, and third place Huawei Technologies at 9 per cent.
