PC shipments hit by economic downturn

17-04-2008

by Charlie Taylor

The downturn in the US economy has begun impacting on PC shipments, according to new data from IDC and Gartner.

According to IDC's Worldwide Quarterly PC Tracker, global PC shipments grew by 14.6 percent year-over-year to 69.5 million units in the first quarter of 2008.

The tracker indicates that the US market slipped to a dismal 3.5 percent year-over-year growth rate as the general economic malaise affecting the economy there began to impact on the local PC market. Moreover, the US share of the worldwide market fell more than 2 points to 23 percent versus the same period last year.

"With the weak economy in the United States, PC shipments were negatively impacted by cautious PC buying in the consumer and commercial markets," said Doug Bell, research analyst, US, PC Tracker Program.

IDC said that much of the growth in shipments during the first quarter came from sales of consumer notebooks. A decline in the average selling price of PCs and the move towards mobile computing also helped to sustain demand.

The latest data shows that other markets more than compensated for the US decline with the EMEA and Asia/Pacific regions coming in more than 2 points above forecast due to continued strength in developing countries.

The EMEA market maintained solid double-digit growth during the first quarter, driven by demand for portable PCs. In Japan, growth continued at a modest rate of between 1-2 percent, while Asia/Pacific (excluding Japan) experienced better-than-expected growth for the quarter even though China's total market slipped sequentially.

According to IDC, HP shipment growth rates outpaced the overall market during the first quarter, but were the lowest among the top five PC manufacturers at 17.4 percent.

Dell enjoyed its strongest quarter in almost two years and saw a 21.6 percent improvement in year-over-year shipments. Acer's worldwide growth continued to outpace the market with a whopping 66 percent growth rate in the first quarter although it suffered a 20 percent drop in US shipments due to a weakening demand for Gateway-branded products.

Lenovo saw its shipments improve 21 percent for the quarter, on the back of its dominant presence in the rapidly growing Asia/Pacific region. The company also experienced stronger-than-expected growth in EMEA portables, but as with many other manufacturers saw slower-than-expected growth in the US.

Lastly, Toshiba saw its worldwide shipments top 3 million during the quarter, a 20.6 percent improvement versus last year.

Elsewhere, Gartner released its worldwide PC shipment estimates for the first quarter on Thursday and also noted the impact of the declining US economy on sales.

According to Gartner, global shipments totalled 71.1 million units in the first quarter, a 12.3 percent increase year-on-year.

"The US results were in line with our expectation, indicating that the PC market was modestly affected by the US recession, although there was no fundamental change in market conditions," said Mika Kitagawa, principal analyst for Gartner's Client Computing Markets group.

"Indications are that the market felt the squeeze in the second half of the quarter. The US market is softening and this can potentially hasten downward price pressure and further intensify competition for the rest of 2008," he added.