IDC Forecasts Healthy Worldwide Q1 2000 PC Demand with 20% Unit Growth over Q1 1999

FRAMINGHAM, Mass., March 7, 1999 – Unit volume in the worldwide PC market this quarter is expected to grow 20% year over year, according to forecast data released today by IDC. With the traditionally slower first quarter in full swing, PC shipments are expected to decline 9% from Q4 1999.

The ongoing pattern of strong global consumer demand continues, but will fall below the levels established during the seasonally high fourth quarter. Commercial market slowness tied to Y2K concerns has largely faded, yielding flat sequential volume in a quarter in which demand typically drops from the prior quarter.

"With Y2K fears largely over and the introduction of Microsoft's Windows 2000, businesses will start picking up the pace of upgrades," said John Brown, research director of IDC's Worldwide Quarterly PC Tracker. "IDC expects the commercial market to show more robust growth this year than last, starting with a pickup in demand this quarter."

Asia/Pacific and Japan will lead the way in PC sales for the quarter with 32% growth each over Q1 1999. Both Asia/Pacific and Japan will continue to benefit from strong consumer demand as price points decline and interest in new desktop designs increase; consumer growth will top 68% and 45% in the regions, respectively.

In the United States, IDC expects Q1 growth to reach 20%, slightly benefiting from the easing of last quarter's tight supply of chips and memory, as held-over demand will be met. Western Europe Q1 year-over-year unit growth is pegged at 10.9%, with sequential volumes declining 22% as retail competition and Internet demand will drive consumer sales.

Vendors

IDC believes the key to vendor growth this quarter is related to strategic alignment with growing consumer and small business segments. In addition, positioning in the U.S. and Asia/Pacific markets will be especially important. Finally, solid Internet strategies and the ability to deliver portable PCs in volume will also be keys to growth. Vendors that appear to have the "right stuff" for growth this quarter are Dell, Gateway, Hewlett-Packard, and Apple.

Table 1

Top 5 Vendors, U.S. PC Shipments, Fourth Quarter 1999

(Thousands of Units)

Q4 1999 Q4 1999 Market Q4 1998 Market Growth

Rank Vendor Shipments Share Shipments Share 1999/98

1 Dell 2,110 17.0% 1,375 12.8% 53%

2 Compaq 2,024 16.3% 1,949 18.1% 4%

3 Hewlett-Packard 1,282 10.3% 783 7.3% 64%

4 Gateway 1,156 9.3% 981 9.1% 18%

5 IBM 694 5.6% 978 9.1% -29%

Others 5,164 41.5% 4,695 44.3% 10%

All Vendors 12,432 100.0% 10,762 100.0% 16%

Shipments are branded factory shipments and exclude OEM sales for all vendors.

Data for all vendors are reported for calendar periods.

Data for Compaq shipments include Digital Equipment shipments; data for Acer includes Texas Instruments.

Source: IDC, 2000

Table 2

Top 5 Vendors, Worldwide PC Shipments, Fourth Quarter 1999

(Thousands of Units)

Q4 1999 Q4 1999 Market Q4 1998 Market Growth

Rank Vendor Shipments Share Shipments Share 1999/98

1 Compaq 4,579 13.7% 4,198 15.1% 9%

2 Dell 3,360 10.0% 2,315 8.3% 45%

3 IBM 2,487 7.4% 2,679 9.6% -7%

4 Hewlett-Packard 2,472 7.4% 1,656 5.9% 49%

5 Fujitsu Siemens 1,691 5.1% 1,452 5.2% 16%

Others 18,868 56.4% 15,600 55.9% 21%

All Vendors 33,455 100.0% 27,901 100.0% 20%

Shipments are branded factory shipments and exclude OEM sales for all vendors.

Data for all vendors are reported for calendar periods.