Despite a sequential growth of 4 percent, the Asia Pacific (excluding Japan) PC market shrank 5 percent annually last quarter (2012 Q3) to 31.4 million units, falling short on IDC's initial forecasts, according to the latest International Data Corp (IDC) report.

The report said that ongoing sluggishness in economies across the region continued to weigh down on consumer sentiments, with channels too, choosing to clear out the old inventory before taking in fresh stocks for the upcoming Windows 8-based PCs, all leading to an unusually quiet Q3.

However, China managed to sustain its Q3 seasonality, which helped many vendors during the quarter. In the region, Lenovo remained at the top position, relying on the aggressive price cuts and promotions to boost shipments in China while also introducing several new models there. The company saw a 9 percent year-on-year unit growth in the last quarter with a market share of 25.3 percent, up from 22.1 percent the year before.

Acer stood second on the list but its market share declined to 9.9 percent from 11.3 percent the previous year. As per IDC data, the company’s shipments dropped 16 percent year-on-year.

Hewlett-Packard (HP) ranked No. 2 last quarter with the market share dropping to 9.3 percent from 9.7 percent last year. The company’s after shipments fell 9 percent year-on-year. Next in the list was Dell, whose shipments declined 10 percent year-on-year with the market share dropping to 9.2 percent from 9.8 percent in 2011 Q3.

ASUS still ranked No. 5, but its PC shipments increased 10 percent year-on-year, which also helped boost its market share to 8.1 percent last quarter from 7 percent last year.

“With 2012 having been quiet so far, October 26 will carry a lot of expectations, not just for Microsoft but for all PC vendors who are anxious to see the new OS deliver on its promise of fueling another momentum in the PC market," said Handoko Andi, Senior Market Analyst for Client Devices at IDC. “And the good thing is that channels have been anticipating the arrival of Windows 8, which will help shipments in Q4 2012. However, 2013 will continue to be a challenge for PC industry vendors as they still need to jockey for consumer mindshare in a rapidly expanding variety of device choices."

According to a recent Gartner report, the worldwide PC market experienced a sharp decline in the third quarter of 2012 with shipments totaling 87.5 million units during the period, a drop of 8.3 percent compared with the third quarter of 2011.

However, the report stated that Lenovo took the top position in worldwide PC shipments for the first time in the company's history, as its share increased to 15.7 percent, while HP's global PC share was at 15.5 percent.

Bloomberg has reported that Lenovo is aware that currently the economic outlook for PC sales doesn't look good. Given that PC sales are down across the board, Lenovo thinks that it’s the best time to for the company to expand into smartphones.

If the PC market continues to plummet, regardless of a projected pick-up in the coming months with the release of Windows 8, Lenovo will relocate its efforts on smartphones.

Milko Van Duijl, Lenovo’s president for the Asia-Pacific and Latin America regions told Bloomberg that Lenovo was already the second-largest smartphone maker in China and planned to seize the top spot from Samsung Electronics.

“Our goal is definitely to get to number one and not only to take smartphones into the China market but also into emerging markets,” said Duijl.

“Despite the challenges in the global PC market, Lenovo continues to expand in both emerging markets and mature markets at the expense of its competitors,” Miles Xie, a Hong Kong-based analyst with Bocom International Holdings Co, wrote in a report Friday.

According to Xie, Lenovo’s efforts are allowing the company to “rapidly expand its market share in the China smartphone market.”