IDC, Gartner: The price was right for PCs in Q2

Second-quarter PC shipments increased faster than market researchers had expected thanks to aggressive pricing.

Despite earlier predictions of a slow year for PC shipments, the continued shift to notebooks and overall decline in PC prices lifted the worldwide PC market to unforeseen heights in the second quarter, research companies IDC and Gartner said Monday.

As recently as May, IDC and Gartner had predicted that second-quarter worldwide PC shipments would grow about 12 percent as consumer purchases slowed amid an uncertain economic forecast. However, IDC pegged actual second-quarter PC shipment growth at 16.6 percent while Gartner reported a 14.8 percent increase in PC shipments.

According to IDC, PC vendors shipped a total of 46.6 million units in the second quarter, up from 39.9 million units last year. Gartner's figures showed a total of 48.9 million PCs shipped during the quarter, up from 42.6 million units last year.

Gartner and IDC report slightly different figures due to the different ways in which the companies record "white-box" shipments, or PCs sold by local distributors or resellers without a well-recognized brand name. These white-box vendors account for a larger share of the market in Gartner's results.

The ongoing replacement cycle that has defined PC purchases for the past few years is slightly beyond its peak, but it has lasted longer than many originally thought, said Charles Smulders, vice president of Gartner's Computing Platforms Worldwide Group. The last strong period of PC growth was during 1999, and many PC users have upgraded their old systems in recent quarters with notebooks, Smulders said. New notebooks offer desktop-like performance at less of a price premium than older notebooks commanded, he said.

Overall PC pricing was very competitive around the world in the quarter, Smulders said. PC vendors can be expected to stay aggressive with their pricing strategies in the second half of the year, which is the primary season for PC purchases, he said.

U.S. shipment growth improved compared with a relatively weak first quarter of this year, but Europe, the Middle East, and Africa was the star region this quarter, IDC and Gartner said.

Dell was the top vendor in each company's market share results. Dell's shipments grew 23.7 percent from last year, and the company now holds 19.3 percent of the worldwide market, IDC said. Gartner's figures showed Dell had 17.9 percent of the market.

Hewlett-Packard Co. remained in second place with 15.6 percent of the market by IDC's count, and 14.6 percent according to Gartner. The company benefitted from the surge in shipments outside the U.S., as HP is the market share leader in many countries throughout Europe.

This quarter was the first to reflect Lenovo Group's purchase of IBM's PC business. As IBM usually did, Lenovo ranked third in worldwide shipments with 7.6 percent of the market, IDC said. Lenovo's total shipments grew 7.7 percent during the quarter, as compared to what its shipment total would have been had it acquired IBM's PC division last year.

Lenovo's shipments in the U.S. fell 9 percent compared to last year, as PC buyers at large corporate accounts held back on purchases from Lenovo during the quarter, Gartner's Smulders said. However, Asia-Pacific is still the leading region for Lenovo as a combined entity, and shipments to that region grew 18 percent.

Acer Inc. continued its strong performance in recent quarters with shipment growth of 62 percent compared to last year. Acer was in the perfect place to capitalize on two notable areas of strength this quarter, low-cost PCs and European growth, IDC said.

Fujitsu Ltd. also had a strong quarter on the back of its Fujitsu-Siemens Computers (Holding) BV joint venture in Europe. Europe now account for 60 percent of Fujitsu's PC shipments, IDC said. Gartner ranked Acer and Fujitsu in the same places and noted the same trends in its report.

In the U.S., Gateway and Apple Computer grew much faster than Dell or HP and captured third and fourth place, respectively, in the U.S. market. Gateway has now worked through any remaining issues surrounding its purchase of eMachines and its move into the retail market, and it enjoyed a 26 percent increase in shipments. Apple's well-documented success in the digital music market with the iPod and iTunes is starting to have a noticeable effect on the company's PC business, IDC said.

Both IDC and Gartner count desktops, notebooks, and servers using processors based on the x86 instruction set when compiling their results.

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Tom Krazit

IDG News Service
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