IDC Sees Healthy Worldwide PC Market Despite Lowering Expectations for the U.S. and Europe

FRAMINGHAM, MA — DECEMBER 7, 2000 — Worldwide PC shipments are expected to reach 40.15 million units in the fourth quarter, according to recently released forecasts from IDC. This represents growth of 19.6% versus the fourth quarter of 1999, and sequential growth of 19.8% from the third quarter of 2000.

 

“Although it's clear consumer demand in the United States is weakening, buying in other regions remains strong,” said Loren Loverde, director of IDC's Worldwide PC Tracker program. “PCs remain the dominant means of accessing the Internet, and a lot of people out there are still buying PCs to get online. The portables segment is also strong in all regions, boosting sales in both consumer and commercial markets.”

In the United States, consumer spending was strong through the third quarter, but early warnings from both retail and direct channels suggest a weaker consumer market in the fourth quarter. IDC believes consumer demand in the United States will remain depressed for two to three quarters before accelerating again. “Even though the fourth-quarter consumer market is weak, the U.S. commercial market is slowly warming. This up-tick is primarily due to two factors: the Windows 2000 upgrade cycle is finally beginning to kick in, and PCs bought early (1997 and 1998) for millennium compliance are reaching the end of their life cycle,” said Roger Kay, manager of desktop PC hardware at IDC. The revised forecast calls for fourth-quarter total unit growth of 15.8% year on year and 11% sequentially.

In Western Europe, consumer sales appear to be healthy while the corporate segment was to blame for lowered estimates. The slower-than-expected uptake of business IT investment in the second half of 2000 led IDC to lower fourth-quarter expectations to 15.1% year on year from nearly 19%.

Asia/Pacific (excluding Japan) continues to grow at an accelerated pace, with year-on-year growth of 42.7% in the third quarter beating expectations by 6.5 percentage points. Continued success of local vendors, growth of affinity distribution models, a thriving portables market, and strong consumer demand are all driving the market. Revised forecasts are for fourth-quarter shipment growth of 33.4% year on year.

In Japan, fourth-quarter growth projections were revised upward to 29.4% year on year, following a slower-than-expected third quarter. Strong consumer demand from repeat and first-time buyers, as well as recovering business investments, are driving the market.

The portables market was particularly strong in the third quarter with worldwide shipments up over 33% year on year. The United States, Western Europe, and Asia/Pacific all strongly outperformed expectations. Portables appear to be picking up steam, as the advantages of mobility gain ground over resources for applications. IDC expects portables shipments to grow almost 32% worldwide in the fourth quarter.

The revised forecasts call for total PC shipment growth to slip to 16.6% worldwide for 2001, down from 18.8% in 2000. Worldwide growth is expected to slow further in the longer term as both business and consumer market saturation increases and growth in emerging markets moderates.

Vendors

Vendors that are well positioned globally, particularly with strength in Asia/Pacific, portables, and consumer segments in emerging regions should be well positioned to gain share. Ranking global vendors that can benefit from these growth factors include Compaq, Dell, Hewlett-Packard, IBM, and Toshiba.

Table 1

Top 5 Vendors, U.S. PC Shipments, Third Quarter 2000

(Thousands of Units)

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| Q3 2000 | | Q3 2000 | Market | Q3 1999 | Market |

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| Growth |

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| Rank | Vendor | Shipments | Share | Shipments | Share |

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| 2000/99 |

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