Businesses keep Q3 PC growth on track

PC shipments have started to ease off, as expected, but the worldwide PC market remained fairly strong in the third quarter, according to research from IDC and Gartner Inc. released Monday.

Vendors shipped a total of 44.2 million units during the third quarter, a growth rate of 11.9 percent compared to the same period last year, according to IDC. Gartner calculated a total of 46.9 million units shipped during the quarter, reflecting growth of 9.7 percent, it said in a statement.

IDC and Gartner cover the market in largely the same way, although Gartner includes certain types of systems, such as white boxes, that IDC excludes. White boxes are PCs assembled and sold without a brand name, mostly by local distributors.

Dell Inc. extended its market share lead among all vendors worldwide with shipments of 8.1 million PCs, or 18.2 percent of the market, said Loren Loverde, director of IDC’s Worldwide Quarterly PC Tracker.

The PC market is coming down from the soaring growth rates posted during 2003, when PC companies finally managed to convince businesses and consumers that the time was right to replace aging PCs bought prior to 2000. Most PC vendors did so well during 2003 that they’ve set themselves up for tough comparisons in 2004 as that growth inevitably stalls, Loverde said.

Gartner saw the strongest effect of that slowdown in the U.S. market where shipments grew only 5 percent in the third quarter, compared to expectations of 8 percent growth for the region.

Most analysts had expected the worldwide PC market to drop into single-digit growth numbers next year as the market moves past a consumer peak that occurred earlier this year, but Gartner’s numbers suggest that has already happened.

“Basically, it’s all part of a healthy and relatively normal recovery,” IDC’s Loverde said. But IDC is a little worried about consumer buying headed into the fourth quarter holiday season, which is usually the strongest quarter for PC purchases, he said.

Until then, commercial customers are keeping shipment growth at the levels IDC expected earlier this year, Loverde said. This is especially true in Europe, the Middle East, and Africa (EMEA) region, which saw shipments grow around 19 percent compared to last year, he said.

The EMEA market tends to lag behind the U.S. market in terms of recovery and trends, and right now EMEA is going through the notebook replacement cycle that was prevalent in the U.S. late last year and early this year, Loverde said.

PC shipments in most Asia-Pacific countries is also growing faster than the overall worldwide rate, Loverde said. Shipment growth in Japan has been a little weaker than in some of its neighboring countries in part because many Japanese customers have already switched over to notebook PCs, he said.

Dell still remains on top of the worldwide market, with a 21 percent increase in shipments compared to last year and a 2 percent market share advantage on Hewlett-Packard Co. (HP), according to IDC. HP is the leading PC supplier to Europe, but Dell has a much larger share of the U.S. market.

HP shipped 7.2 million PCs during the third quarter worldwide, up 9.1 percent from last year, IDC said.

IBM Corp. and Toshiba Corp. had solid quarters on the strength of the commercial PC market, Loverde said. IBM was third worldwide with shipments of 2.6 million units, while Toshiba was fifth with 1.6 million units shipped. Both companies recorded shipment growth of about 16.5 percent.

Fujitsu Ltd. and its Fujitsu Siemens Computers (Holding) BV counterpart were fourth in terms of worldwide shipments with 1.7 million units shipped during the quarter, an increase of almost 11 percent, IDC said.

Gartner ranked the top five worldwide vendors in the same order as IDC, with slight differences in terms of units shipped and market share.

IDC will wait for the fourth quarter numbers before making any predictions about how fast the expected drop-off in shipment growth will proceed, Loverde said. Earlier this year, IDC said the PC market would grow 8.7 percent in 2005.

The fourth quarter is usually the most active quarter of the year, Loverde said. About 28.8 percent of all PC shipments for the full year have come during the fourth quarter over the last two years, he said. In Western Europe, that percentage increases to 32.8 percent.

The top five vendors in the third quarter as ranked by worldwide PC shipments, according to IDC data:

Rank, Vendor, Q3 2004 (units in millions), Market Share (%), Q3 2003 (units in millions), Market Share (%) ,Unit Growth (%) –

1. Dell, 8.05, 18.2, 6.67, 16.9, 20.7.

2. HP, 7.15, 16.2. 6.56, 16.6, 9.1.

3. IBM, 2.64, 6.0, 2.27, 5.8, 16.4.

4. Fujitsu/Fujitsu Siemens, 1.73, 3.9, 1.56, 4.0, 10.7.

5. Toshiba, 1.60, 3.6, 1.38, 3.5, 16.5.

Others,  23.01, 52.1, 21.05, 53.3, 9.3.

IDC is a division of International Data Group Inc., the parent company of IDG News Service.