IDC Says PC Market Remains Soft Despite Improvement

FRAMINGHAM, MA – APRIL18, 2002 – Worldwide PC shipments declined slightly in the first quarter of 2002, reflecting continued pressure on the market. Shipments were down 2.7% year on year and 8.9% sequentially to a total of 31.4 million. Market growth was up relative to a projected decline of 5.4% year on year, consistent with a slowly recovering market.

 

"The good news is that the market is no longer contracting rapidly, and the gains made in the fourth quarter have not evaporated," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker. "Nevertheless, we have yet to see key segments return to significant growth. The year-on-year comparison was much easier this quarter but emerging markets are struggling to maintain positive growth, the commercial segment continues to invest cautiously, and consumers will not come back into the market in force until later in the year."

Shipments in the United States were nearly on par with a year ago, as the market transitioned from decline to recovery. First quarter shipments were down 0.4% year on year, while a sequential decline of 6.1% was modest compared to the historical average of -10.4%.

"We're in slack-water conditions," said Roger Kay, director of Client Computing at IDC. "That period between the tides when the sea is fully out but has not yet come back in. The good news is that the U.S. market has truly reached low tide and is turning around, albeit slowly." In terms of growth, notebooks continue to outpace desktops in the United States. From a segment point of view, consumers displayed a slightly-better-than-normal seasonal purchasing pattern, but commercial buyers are still moving slowly.

Regional Outlook:

United States – Still no growth although the market is improving. Consumer spending held up well for the first quarter, although the market remains quite cautious. We expect the United States to lead as the market recovers.

Europe – Traditional sequential decline from the fourth quarter. Growth trend is similar to the United States, although more moderate changes in growth. Consumer and commercial buyers remain cautious and are spending on other priorities.

Japan – Market decline continued in line with expectations. Economic weakness weighed on the market, particularly in the commercial segment.

Asia – Regional growth remained positive but in the low single digits. Growth in China improved, while the region's second and third largest markets, South Korea and Australia, returned to positive growth.

Vendor Highlights:

Dell – Made solid gains in shipments and market share in all major regions. Dell is competing aggressively in this market transition by leveraging its direct business model in the United States and abroad.

Compaq – Performed reasonably in light of the merger although growth was below market for both U.S. and international.

HP – Despite the distraction of merger issues, HP refocused its PC business – growing shipments roughly in line with the market. In the US, HP managed flat growth from a year ago although declines accelerated in Asia.

IBM – IBM also refocused its U.S. business, particularly in commercial desktops while worldwide growth was slightly behind the market.

Fujitsu – Fujitsu held onto its home market of Western Europe, but experienced slight declines in Asia.

Gateway – Held market share in the markets that it has chosen to defend, U. S. consumer and small business segments, as a result of an aggressive price-cutting campaign. Nevertheless, overall shipments were down significantly.

Top 5 Vendors, U.S. PC Shipments, First Quarter 2002 (Preliminary)

(Units Shipments are in thousands)

Q1 2002 Rank Vendor Q1 2002 Shipments Market Share Q1 2001Shipments Market Share Growth 2002/2001

1 Dell 3,013 28.4 % 2,524 23.7 % 19.4 %

2 Compaq 1,280 12.1 % 1,473 13.8 % -13.1 %

3 Hewlett-Packard 1,086 10.2 % 1,084 10.2 % 0.2 %

4 Gateway 650 6.1 % 923 8.7 % -29.6 %

5 IBM 577 5.4 % 565 5.3 % 2.0 %

Others 3,994 37.7 % 4,068 38.2 % -1.8 %

All Vendors 10,600 100.0 % 10,638 100.0 % -0.4 %

Notes:

* Vendor shipments are branded shipments and exclude OEM sales for all vendors and represent shipments to distribution channels or direct to end-users.

* Data for all vendors are reported for calendar periods.

Source: IDC, April 2002

Top 5 Vendors, Worldwide PC Shipments, Fourth Quarter 2001 (Preliminary)

(Units Shipments are in thousands)

Q1 2002 Rank Vendor Q1 2002 Shipments Market Share Q1 2001Shipments Market Share Growth 2002/2001

1 Dell 4,824 15.4 % 4,151 12.9 % 16.2 %

2 Compaq 3,367 10.7 % 3,815 11.8 % -11.8 %

3 Hewlett-Packard 2,340 7.5 % 2,433 7.5 % -3.8 %

4 IBM 1,832 5.8 % 2,025 6.3 % -9.5 %

5 Fujitsu/Siemens 1,606 5.1 % 1,819 5.6 % -11.7 %

Others 17,390 55.5 % 17,993 55.8 % -3.4 %

All Vendors 31,359 100.0 % 32,236 100.0 % -2.7 %

Notes:

* Vendor shipments are branded shipments and exclude OEM sales for all vendors and represent shipments to distribution channels or direct to end-users.