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PC Market Growth Tops 17% As Low-Cost and Portable PCs Continue To Fuel Domestic And International Markets

Posted on: Monday, 17 October 2005, 18:00 CDT

Worldwide PC shipments increased by more than 17% in the third quarter despite rising interest rates and oil prices, and a more conservative economic outlook, according to IDC's Worldwide Quarterly PC Tracker. The appeal of both low-cost and portable systems continued to drive substantial growth. International markets continued to grow quickly, but even U.S. shipments grew by 11% over the prior year. The latest data show total worldwide PC shipments increasing by 17.1% year on year versus an August forecast of 13.3%.

"We continue to see remarkable growth in the PC market and relative independence from broader economic trends," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker. "Currently, the economic environment is not the critical factor affecting PC adoption cycles. What we're seeing now is a combination of PC replacements and new users responding to low-price milestones. Slowing economic growth should eventually constrain PC demand, but for the moment, the outlook remains quite strong."

"Notebook adoption continued to drive PC growth in the U.S. complemented by the desktop market which was stronger than expected due to aggressive pricing," said Richard Shim, senior research analyst of Client Computing at IDC. "The third quarter is typically defined by the back-to-school season, which was particularly strong this year. Notebooks were a significant influence in the consumers' back-to-school shopping and that carried over to other markets."

Regional Outlook

-- United States - A strong back-to-school season provided a

boost to the market and mid-tier vendors performed well

following distribution channel adjustments. Hurricane Katrina,

which made landfall in Louisiana on August 29, likely had some

impact on the last month of the quarter, although a larger

impact is expected for the fourth quarter as rising fuel

prices and falling consumer confidence contribute to economic

and inflationary worries.

-- EMEA - Small business and consumer purchases related to

European Union expansion, general infrastructure investments,

and low prices continued to fuel the surge in both portable

and desktop systems. A solid back-to-school market and overall

strong growth set the stage for a robust fourth quarter.

-- Japan - The consumer market continued to improve, pushing

growth into double-digits in response to attractive new

product launches. The commercial market also remained strong

despite expectations of slowing growth.

-- Asia/Pacific - Rising oil prices and measures to control the

Chinese economy have done little to constrain PC growth. Low

prices and rising adoption continued to fuel both business and

consumer purchases. Demand for portable PCs, which now account

for over 20% of total shipments, also remained strong.

Vendor Highlights

-- Dell - Dell had another solid quarter with strong growth

across all regions. Total growth of almost 17.8% was down from

a surge of almost 24% in the second quarter, but up from a low

of 14% in 1Q05. The company benefited from particularly strong

growth in EMEA, Asia/Pacific, and Latin America, although

other vendors also fared well in EMEA.

-- HP - HP continued to gain momentum with growth of 17.9%

boosted by its leadership position in the rapidly growing EMEA

region and by a solid performance in Asia/Pacific. The company

also saw strong growth of portable systems and in both

enterprise and consumer segments.

-- Lenovo - Lenovo performed well in its second quarter

post-merger. Total shipments were up over 13% year on year

with record volumes across form factors. Although year-on-year

growth was slightly behind the market, it improved

significantly from the second quarter and sequential growth

was above market. The growth reflects the company's success

integrating IBM and Lenovo and growing comfort with the new

company among clients.

-- Acer - Acer continued its rapid expansion with growth over 50%

in the third quarter. Although growth was down from a peak in

the second quarter, the company continued to see rapid growth

in EMEA and is building momentum in North America and

Asia/Pacific.

-- Fujitsu/Fujitsu Siemens - Fujitsu Siemens continued to gain

share in the third quarter, although growth remains focused in

Europe. Shipments in EMEA were up over 28% in the third

quarter, accounting for nearly 65% of total volume. Japan

accounted for nearly one third of shipments, but growth was

roughly flat.

-- Gateway - Gateway delivered its second consecutive quarter of

significant recovery. Following years of decline and the

acquisition of eMachines in 2Q04, the company now appears to

be on the right track. Total shipments grew by over 25% in the

third quarter - down a couple points from the second quarter,

but still substantially ahead of the market. The company

clearly leveraged its new distribution partners and appears

well positioned to capture consumer demand in the fourth

quarter.

-- Apple - Apple cranked up its performance another notch,

boosting growth in total PC shipments by 48%. The company

refreshed the Mac-Mini line and its PC business continues to

benefit from the rapid growth of its music business. Growth

was particularly strong in its retail outlets and in Europe,

although growth in the Americas and Japan was also healthy. Top 5 Vendors, Worldwide PC Shipments, Third Quarter 2005 (Preliminary) (Units Shipments are in thousands) 3Q05 3Q05 Market 3Q04 Market Growth Rank Vendor Shipments Share Shipments Share 2005/2004 ----------------- ------ --------- ------ --------- ------ ---------- 1 Dell 9,483 18.0% 8,050 17.9% 17.8% 2 HP 8,464 16.0% 7,178 15.9% 17.9% 3 Lenovo 4,072 7.7% 1,163 2.6% 250.2% 4 Acer 2,493 4.7% 1,622 3.6% 53.7% Fujitsu/Fujitsu 5 Siemens 1,995 3.8% 1,735 3.8% 15.0% Others 26,303 49.8% 25,347 56.2% 3.8% All Vendors 52,809 100.0% 45,095 100.0% 17.1% 3 Lenovo (Merged) 4,072 7.7% 3,602 8.0% 13.1% Notes: -- Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold. -- PCs include 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 2Q05, 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, October 17, 2005 Top 5 Vendors, U.S. PC Shipments, Third Quarter 2005 (Preliminary) (Units Shipments are in thousands) 3Q05 3Q05 Market 3Q04 Market Growth Rank Vendor Shipments Share Shipments Share 2005/2004 ----------------- ------ --------- ------ --------- ------ ---------- 1 Dell 5,638 33.2% 5,023 32.8% 12.2% 2 HP 3,450 20.3% 3,133 20.5% 10.1% 3 Gateway(a) 1,082 6.4% 800 5.2% 35.2% 4 Lenovo 757 4.5% 0 0.0% N/A 5 Apple 737 4.3% 510 3.3% 44.6% Others 5,305 31.3% 5,826 38.1% -8.9% All Vendors 16,969 100.0% 15,293 100.0% 11.0% Lenovo 4 (Merged) 757 4.5% 711 4.6% 6.4% 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 include 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, October 17, 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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