PC shipments drop, consumers to reap rewards

"Competitive pricing by major vendors in the month of December failed to increase consumer demand," said Andy Woo, analyst at Dataquest. He attributed this cautious buying environment over the quarter to several factors, including the continuing exchange rate fluctuation; negative reports of the US market; the lingering effects of the Olympics on the Australian market; and even the rising cost of petrol.

"The general slowdown in the overall economic environment and a loss of consumer confidence had a significant impact on the market," Woo said. "At the same time, the traditional boost in Christmas buying did not materialise. Simply put, pessimistic consumer sentiment resulted in a shift towards purchasing lower value items instead PCs."

The fourth quarter of 2000 declined by 18 per cent compared to the third quarter of 2000 and decreased by 11 per cent compared to the previous year, according to preliminary findings by Dataquest.

Although this slowdown may be bad news for suppliers, Woo said consumers can expect to benefit in the short term as vendors will need to slash prices further still to clear excess inventories. "Consumers can therefore expect some bargains during the first quarter of 2001."

Overall, Compaq had the greatest share of the PC market in Q4 with 14.2 per cent. It was ahead of IBM (13.8 per cent), HP (9.2 per cent) and Dell (8.1 per cent).

Looking ahead, Woo indicated positive growth is still forecast for 2001, saying small and medium business and the home market are expected to drive this growth. In addition, emerging technologies such as Bluetooth applications and Windows 2000 are expected to drive upgrades and the replacement cycle.

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Howard Dahdah

PC World

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