IDC Results Show Compaq Finished 1999 as Number One in Worldwide PC Market, but Dell Heads into Millennium Leading in the U.S.

FRAMINGHAM, Mass., January 24, 2000 – Healthy consumer demand and record volume in Asia capped a strong close to the 1999 worldwide PC market, which according to preliminary results from IDC grew 23.3% and reached 112.7 million units for the total year. The year ended with Q4 worldwide unit shipments of 33.2 million units, representing growth of 19% year on year and 18% sequentially.

Worldwide volume increases in Q4 were led by strong results in the Japanese and Asia/Pacific (excluding Japan) markets, which both registered year-on-year growth of 38%. The consumer market was the primary catalyst for the Japanese market in 1999, which topped all regions for the year with 36% growth. Y2K issues failed to stymie the Asia/Pacific market as small and medium business spending offset the impact of a large business buying slowdown in the fourth quarter. "After an abysmal 1998, the Asian markets have made a complete turnaround and pose great opportunity for manufacturers in the new millennium," said John Brown, director of Worldwide PC Tracking at IDC.

Despite some softness in the business marketplace, the United States remained stable, fueled by robust consumer buying. For Q4, U.S. volume grew 5% sequentially and 17% over the same quarter last year. For 1999 as a whole, the market expanded at a healthy 25% over 1998 as yearend consumer demand roared based on low price points, rebates, and major changes in product design.

Internet demand and lower PC prices in Western Europe continue to drive consumer sales as the Y2K effect was offset by strong small and medium business demand in the commercial sector. Elsewhere, market expansion was led by the revitalized markets in Russia and Brazil, coupled with positive results from Canada and the Middle East.

Vendor Results

Unit gains worldwide were healthy for many major vendors in a market marked by major Y2K concerns and a tightening in consumer demand. The top vendors in the United States continue to focus on tapping into consumer PC demand, increasing efficiencies, and building programs and practices devoted to creating "outside-the-box" revenues.

In the United States, Dell held tight to the number-one position with 2.1 million units in the quarter and also managed to obtain the number-one ranking for the year. The direct vendor turned in year-over-year growth of 53%. Dell managed to work through Q4 obstacles related to pricing and component shortages. Overall, the vendor continues to show strong growth across a spectrum of customer segments, form factors, and geographies.

Compaq retained its long-standing position in Q4 as the number-one vendor worldwide and continues to be in a horse race for the number-one spot in the United States. Despite a number of disruptions related to management and strategic issues throughout 1999, Compaq also held the top spot for the year with 14% market share on growth of 19% over 1998.

IBM continues to struggle in the U.S. market as it took its first steps to pull out of the retail market, relinquishing sales during the seasonally strong consumer quarter. Even with volume woes related to a retreat from the consumer market and Y2K-induced corporate buying sluggishness, the company was able to remain one of the top five manufacturers in the United States.

Withstanding chip shortages and Y2K slowness, Gateway remained in the top five rankings in the U.S. market and obtained the number-three ranking for the full year. Strong consumer sales were able to offset weakness in the commercial sector and keep the vendor moving in the right direction.

Hewlett-Packard took advantage of strong holiday buying that benefited its consumer lineup and boosted its U.S. PC volume 64%. Outside the United States, the company continues to have success in Western Europe and Asia/Pacific due to the performance of its commercial lineup.

On a worldwide basis, the combined Fujitsu and Siemens weighed in at the number-five market share spot. After one quarter, the merger of these two companies has proven to be beneficial, with a move to the number-two position in Western Europe.

Table 1

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

(Thousands of Units)

Q499 Q4 1999 Market Q4 1998 Market Growth

Rank Vendor Shipments Share Shipments Share 1999/98

1 Dell 2,110 16.8% 1,375 12.8% 53%

2 Compaq 2,024 16.1% 1,949 18.1% 4%

3 Hewlett-Packard 1,282 10.2% 783 7.3% 64%

4 Gateway 1,156 9.2% 981 9.1% 18%

5 IBM 694 5.5% 978 9.1% -29%

Others 5,280 42.1% 4,696 43.6% 12%

All Vendors 12,546 100.0% 10,762 100.0% 17%

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

— Data for all vendors are reported for calendar periods.

— Data for NEC/PBNEC includes shipments for Packard Bell, NEC, NEC Japan, NEC China, and ZDS.

— Data for Compaq includes shipments for Compaq, Digital Equipment, and Tandem.

Source: IDC, Q1 2000

Table 2

Top 5 Vendors, Worldwide PC Shipments, Fourth Quarter 1999 (Preliminary)

(Thousands of Units)

Q499 Q4 1999 Market Q4 1998 Market Growth

Rank Vendor Shipments Share Shipments Share 1999/98

1 Compaq 4,552 13.7% 4,196 15.1% 8%

2 Dell 3,357 10.1% 2,315 8.3% 45%

3 IBM 2,505 7.6% 2,677 9.6% -6%

4 Hewlett-Packard 2,477 7.5% 1,657 6.0% 49%