Dell predicts major PC market consolidation and rules out smartphones

Dell, HP and Lenovo could account for 80 percent of the PC market in future

Market consolidation could see Dell, Lenovo and HP accounting for the lion's share of a shrinking PC market over the next five to seven years, squeezing out smaller players.

The comments were made by Dell founder and chief executive Michael Dell, speaking at a roundtable conference in India this week, as reported by Reuters.

Dell claimed that his firm is gaining market share compared with Lenovo and HP, according to the report, which are currently the largest and second largest PC manufacturers in terms of global market share, with Dell taking third position.

"In the first half of this year, we outgrew the two in notebooks and we have grown now 10 quarters in a row," Reuters reported Dell as saying.

Dell also predicted that consolidation in the PC market could see the top three manufacturers expand their share of the global market over the next few years. Lenovo, HP and Dell currently account for just over half of all the systems sold, but Dell said he believed this could grow to about 80 percent within five to seven years.

The PC market has been declining for some time. Research firm Gartner said in July that sales had dropped by 9.5 percent in the second quarter of 2015 compared with the previous year. The analyst firm attributed this to various factors, including the end of a spike in sales when Windows XP reached end of life last year, and the build up to the Windows 10 launch.

Dell's remarks indicate that he believes his firm can continue to grow sales, even as the overall market continues to decline. However, Dell is likely to meet with fierce completion from Lenovo, which has also seen its sales expand and is now looking to take market share from Dell and HP in other areas such as servers, according to a recent interview with V3.

The top three vendors are currently following different strategies. Reuters reported Dell as saying that his firm is keeping clear of the smartphone market, while Lenovo has acquired smartphone maker Motorola.

"I think there are maybe only one or two companies who make a profit in the smartphone business today and there are quite a few companies that lose substantial sums of money," Dell said.

"So, no thank you. I do not want to be in the smartphone business."

Meanwhile, HP is in the process of splitting itself into two businesses, one focused on the enterprise market and the other on printing and consumer hardware, while Dell has always touted the benefits of being a one-stop provider of end-to-end services and solutions for its customers.