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PC Market Growth Surges As Portables And Low-Cost Systems Drive Demand, According To IDC

Posted on: Monday, 18 July 2005, 18:00 CDT

The PC market again proved its resilience as worldwide shipments jumped to 16.6% growth in the second quarter, according to IDC's Worldwide Quarterly PC Tracker. Low-cost systems and portable adoption continue to be key market drivers, stimulating consumer adoption as well as commercial replacements. EMEA was once again a source of tremendous growth while other regions are also performing well. Worldwide growth was up more than 4% from May forecasts of 12.3%, while growth of 11.7% in the United States was in line with forecasts of 11.6%.

"This kind of growth in the PC market is just amazing," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker. "At some point we expect the flood of consumer and portable demand to let up, but so far falling prices and demand across regions and market segments continues to support growth. Such consistent growth raises the prospect that the recent replacement wave is being supplanted by growing adoption that could sustain higher growth into the future."

"While desktop sales remain stimulated by record low prices, notebook adoption in the United States continues to accelerate," said David Daoud, client computing research manager at IDC. "Segments that have shown sensitivity to pricing have been reacting positively to incentive pricing while fully endorsing mobile computing. This trend of notebook adoption in the U.S. market is expected to remain strong well into the forecast."

Regional Outlook

-- United States - As expected, year-on-year growth in the United

States recovered from a first quarter that was constrained by

slow public sector spending and a difficult comparison to a

year ago. Public sector and consumer demand improved in the

second quarter, while the business segment remained solid.

-- EMEA - Growing competition in the consumer notebook market is

increasing attention on low cost systems and fueling demand.

Replacement and consumer activity, as well as investment

related to European Union expansion and integration, helped

boost overall EMEA growth above 20% after several quarters of

growth in the high teens.

-- Japan - Consumer demand continues to recover gradually.

Constrained by slow economic growth, competition from other

consumer electronics, and high PC penetration, particularly of

portables, growth is now rising in response to low prices and

an aging installed base.

-- Asia/Pacific - Major markets continue to perform well with a

notable rise in regional growth. Despite concerns of rising

interest rates, oil prices, and efforts to manage the Chinese

economy, business investment and consumer interest in low-cost

PCs is accelerating the market.

Vendor Highlights

-- Dell - Dell had a solid second quarter, expanding its lead

with worldwide growth of nearly 24%. Following a relatively

slow first quarter performance, the company recaptured

momentum with near 50% growth in Asia/Pacific, Latin America,

and worldwide portable shipments.

-- HP - International shipment growth of nearly 23% helped HP

stay ahead of the market with worldwide growth of 16.3%. HP

saw strong demand in Europe, where it maintains the market

lead, and in Asia/Pacific.

-- Lenovo - Lenovo appears to be working through its merger

issues fairly well. Worldwide growth of 7.7% for the combined

companies was up from a merged 6.8% in the first quarter, and

only 2.1% for IBM in Q1 2005. Although year-on-year growth in

the United States was down almost 12%, U.S. shipments

increased over 9% sequentially. Asia/Pacific (excluding

Japan), which now represents over 50% of the company's

shipments, grew by over 18% year on year.

-- Acer - Acer continues to be very successful throughout EMEA,

driving growth of over 65% with low-cost portables and

desktops through an extensive distribution channel. The

company also saw strong growth in Asia/Pacific and is

developing operations in the Americas including a re-entry to

retail in the United States.

-- Fujitsu/Fujitsu Seimens - Fujitsu Seimens continues to develop

its European focus. While shipments in Japan have been flat

over the past year, European shipments have grown by over 20%

and now account for over 60% of the company's PC business.

-- Gateway - A year after its acquisition of eMachines and

following distribution agreements with high profile channels,

Gateway saw shipments rise by over 26% year on year. The

growth is welcome evidence that the eMachines acquisition is

bearing fruit and that the company will be ready for consumer,

education, and small business sales in the second half of the

year. Still, the growth comes after a fairly weak first

quarter, and the company will need several quarters of solid

growth to regain momentum.

-- Apple - Apple had another very strong quarter with growth of

more than 37%. Growth in retail, Europe, and Asia/Pacific

(excluding Japan) all grew by more than twice the worldwide

rate. The iMac mini as well as the visibility and appeal of

Apple's music business, including the iPod line, has clearly

benefited the company's PC business and the company appears

well positioned for education and consumer sales going into

the second half of the year. Top 5 Vendors, Worldwide PC Shipments, Second Quarter 2005 (Preliminary) (Units Shipments are in thousands) Q2 2005 Q2 2005 Market Q2 2004 Market Growth Rank Vendor Shipments Share Shipments Share 2005/2004 ---------------------------------------------------------------------- 1 Dell 8,982 19.3% 7,264 18.2% 23.7% 2 HP 7,251 15.6% 6,235 15.6% 16.3% 3 Lenovo 3,535 7.6% 952 2.4% 271.3% 4 Acer 2,032 4.4% 1,253 3.1% 62.2% 5 Fujitsu/Fujitsu Siemens 1,722 3.7% 1,527 3.8% 12.8% Others 23,044 49.5% 22,711 56.9% 1.5% All Vendors 46,566 100.0% 39,941 100.0% 16.6% 3 Lenovo (Merged) 3,535 7.6% 3,283 7.1% 7.7% Notes: -- Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold. -- PCs includes Desktop, Notebook, Ultra Portable, and x86 Servers. -- PCs do not include handhelds. Data for all vendors are reported for calendar periods. -- Data for Lenovo includes shipments for IBM PCD (including Desktop and Portable PCs and excluding x86 Servers and Personal Workstations) starting in Q2 2005, and only Lenovo data for prior quarters. This reflects the legal status of the companies, which merged during the second quarter of 2005. Source: IDC, July 18th, 2005 Top 5 Vendors, U.S. PC Shipments, Second Quarter 2005 (Preliminary) (Units Shipments are in thousands) Q2 2005 Q2 2005 Market Q2 2004 Market Growth Rank Vendor Shipments Share Shipments Share 2005/2004 ---------------------------------------------------------------------- 1 Dell 5,111 34.7% 4,396 33.3% 16.3% 2 HP 2,761 18.7% 2,579 19.5% 7.0% 3 Gateway(a) 890 6.0% 703 5.3% 26.6% 4 Apple 658 4.5% 495 3.7% 33.0% 5 Lenovo 611 4.1% 0 0.0% N/A Others 4,718 32.0% 5,028 38.1% -6.2% All Vendors 14,748 100.0% 13,201 100.0% 11.7% 5 Lenovo (Merged) 611 4.1% 667 5.1% -8.4% Notes: -- (a) IDC estimates prior to Gateway's financial earnings report -- Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold. -- PCs includes Desktop, Notebook, Ultra Portable, and x86 Servers. -- PCs do not include handhelds. Data for all vendors are reported for calendar periods. -- Data for Lenovo includes shipments for IBM PCD (including Desktop and Portable PCs and excluding x86 Servers and Personal Workstations) starting in Q2 2005, and only Lenovo data for prior quarters. This reflects the legal status of the companies, which merged during the second quarter of 2005. Source: IDC, July 18th, 2005

IDC's Worldwide Quarterly PC Tracker gathers PC market data in 55 countries by vendor, form factor, brand, processor brand and speed, sales channel and user segment. The research includes historical and forecast trend analysis as well as price band and installed base data.

For more information, or to subscribe to IDC's Worldwide Quarterly PC Tracker, please contact Kathy Nagamine at 650-350-6423 or knagamine@idc.com. You may also contact IDC's sales hotline at 508-988-7988 or email sales@idc.com.

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Additional information can be found at www.idc.com

All product and company names may be trademarks or registered trademarks of their respective holders.

Source: Business Wire

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