TBR's prediction is that once the business achieves five per cent market share globally, Huawei will begin to instill greater price discipline in its PC business and seek to balance market share growth with its profit and margin objectives for the PC business.
Additionally it said that as market share grows, likely rapidly due to Huawei's brand strength in China's consumer market, the company will leverage its brand strength and device-selling strategies to dictate average selling price (ASP) and customer trends, as it has with APAC's smartphone market.
Concern for competitors?
Huawei's lower average sales prices (ASPs) for premium PCs will force Dell Technologies, HP and Lenovo to respond in kind, complicating efforts of those companies to offset the impact of increased PC component costs, especially memory and solid-state hard drives, TBR said.
The analysts firm added that these three companies have, to varying degrees, articulated plans to raise PC ASPs to stabilise margins.
"Huawei's entry into the PC market disrupts and undermines those plans, loosens the grip of these vendors on the global PC market, and blocks these vendors from capitalising on opportunities in China's and APAC's PC market," Narcotta added.
"A new competitor in the premium PC space will stall some of the market momentum enjoyed by Dell Technologies, HP, Asus and Apple, and rob these vendors of revenue and profit."
Narcotta said Huawei occupying five per cent of the global PC market would represent a shift of nearly US$5 billion in revenue to a new vendor, and as the vendor's market share grows over the next five years, the revenue drain will intensify.
A likely near-term outcome of this revenue shift, according to TBR, is that smaller OEMs, such as Acer, Fujitsu and Toshiba, will be forced out of the PC business.
According to Narcotta, Acer does not possess the financial means or manufacturing scale to combat another larger, stronger competitor in the premium PC space.
Meanwhile, Fujitsu, already in talks to form a PC joint venture with Lenovo, will shifts its focus to its cloud, data centre and services businesses, and Toshiba will elect to finally exit the PC market in which it has languished over the last two years.
Will the gamers come to play?
"Asus' strength in gaming PC markets somewhat insulates it from Huawei's moves, but Asus' mainstream consumer notebook PC business will be disrupted," Narcotta added.
In the longer term, as Huawei's PC business gains scale in China, Dell Technologies, HP, Lenovo and Apple will encounter much stronger competition in APAC, Narcotta said, with Lenovo the most affected, as the bulk of its PC revenue is generated by China.
As with its smartphone business, Huawei has proved the U.S. is not a requirement for success. Head-to-head competition in the U.S. will not be common for most vendors, but TBR said it does amplify the degree to which Dell Technologies, HP, Lenovo and Apple will rely on the U.S. for PC revenue, as addressable markets outside the U.S. for these vendors, especially in APAC, shrink.
Sign up for Computerworld eNewsletters.