Global PC shipment growth slows

Worldwide third quarter PC shipments increased 9.7% from the same period last year, slightly below forecast expectations, says Gartner.

Earlier this week, rival research firm International Data Corporation said PC shipments had increased 12% during the same period.

Gartner analysts say global shipments were impacted by slower sales in the US market, where PC shipments grew 5% in the third quarter. However, analysts expect shipments to increase by more than 8% in this quarter.

"US home notebook shipments were strong during the quarter, but desktop demand was much weaker, which brought down back-to-school shipments overall," says Charles Smulders, VP of Gartner`s Computing Platforms Worldwide group.

On a vendor basis, Dell extended its unit share lead both worldwide and in the US in the third quarter of 2004. Dell performed particularly well in Europe, with shipments increasing 36.7% compared to the same period last year.

Hewlett-Packard`s growth was in line with the industry average, allowing it to maintain its market share compared to a year ago.

"Regionally, HP is coming under pressure in the US retail market as rivals compete more aggressively for shelf space," Smulders says.

In the US, PC shipments totalled 16.2 million units in the third quarter of 2004. Gartner analysts said notebook sales were strong, but desktop demand was much weaker.

The Europe, Middle East and Africa (EMEA) region also performed slightly below expectations. PC shipments totalled 14.3 million units, up 12.6% compared to a year ago. Analysts had expected shipments to grow 14%. Within EMEA, growth in Western and Eastern Europe slowed down while the Middle East and Africa region grew strongly.

"The market is on a downward trend compared to the peak nearly a year ago as replacement cycles come to an end and with consumer demand beginning to waver," says Ranjit Atwal, analyst at Gartner`s Computer Platforms group. "Back-to-school sales of PCs fell below expectations and many retailers are expecting to continue promotions through at least the first part of October to clear product inventories."

On a vendor basis, Hewlett-Packard gained market share, but it under-performed compared to its rivals. It faired better in distribution compared to the second quarter. However, it is still enduring dissatisfaction around its channel strategy.

Dell and Fujitsu-Siemens outgrew the market and the combined share of the top five vendors continues to increase, heightening the prospect of market consolidation in the middle to lower tiers of the market.

In the Asia/Pacific region, India and Australia showed some of the strongest shipment increases with growth rates of 30% and 19%, respectively. Shipments in China grew 11%. However, a major concern going forward is the impact of government control measures to prevent overheating of the Chinese economy.

PC shipments in Latin America grew 29% in the third quarter. The strong shipment increase is attributed to PC replacement demand, lower interest rates, flexible PC vendor purchasing programmes, broadband deployment and better system specification/price point positioning.