PC Market Remains Strong With Commercial Demand And EMEA Leading Growth, According to IDC

FRAMINGHAM, MA – OCTOBER 18, 2004 – The worldwide PC market remained strong in the third quarter of 2004 with growth of nearly 12% driven by commercial demand and continued strength in EMEA, according to IDC's Worldwide Quarterly PC Tracker. Total shipments rose to 44.2 million units for the quarter, about 0.5% ahead of forecast and second only to the fourth quarter of 2003 in total volume. Aggressive pricing coupled with mobile adoption, the business replacement cycle, and a strong Euro were the primary market drivers.

"PC market performance in the third quarter reflects persistent commercial activity and continuing demand in areas such as mobile computing, Europe, and Rest of World," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker. "Nevertheless, we would like to see more consumer activity going into the fourth quarter, and growth in Asia could have been stronger."

"Despite rumblings in the supply chain, Intel's inventory problem, and isolated warnings by various companies, the market appears to have been driven by larger factors," said Roger Kay, vice president of Client Computing at IDC. "Among these factors, the overall economy holds the greatest sway over PC market performance, but structural dynamics — the degree of saturation in a given region, where we are in the replacement cycle, and rising performance requirements — also clearly play an important role."

Regional Outlook

— United States – Although strong third quarter growth in 2003 made for a much more difficult year-on-year comparison and growth was expected to slow from prior quarters, year-on-year growth in 3Q04 was slightly ahead of expectations. The trend shows the ongoing contribution by the commercial segment going into the fourth quarter.

— EMEA – Continued growth in notebook shipments during the back-to-school season combined with desktop replacements across business and consumer segments sustained another strong quarter in EMEA.

— Japan – Commercial demand continues to drive the market, although consumer PC shipments remain weak, limiting overall market growth.

— Asia/Pacific – Most countries in the region showed positive growth, although shipments in South Korea declined due to a weak economy.

Vendor Highlights

— Dell – Dell continued to lead the market and expand its share with more than 20% growth year on year. Growth in portables and in international markets were each more than 30% with strong participation from the commercial segment.

— HP – HP remained the market leader in EMEA and saw strong growth in Asia. Nevertheless, year-on-year growth in the United States dropped to low single digits due to a difficult comparison with the company's aggressive push in the second half of 2003 and rising competition in the consumer segment.

— IBM – IBM had a strong quarter, gaining share in the United States and abroad. Relative to market the company's best performances were in Asia/Pacific and the United States. Portables growth also remained strong, growing to over 46% of client shipments.

— Fujitsu/Fujitsu Siemens – Fujitsu Seimens performed roughly in line with the market in its core regions of Europe and Japan, although growth slowed from a peak in the second quarter.

— Toshiba – Toshiba had a strong quarter across the major regions and moved back into the Top 5 for both the United States and Worldwide.

— Gateway – Gateway's sequential growth was a few points ahead of the market, reflecting some improvement in the second quarter following the merger with eMachines. Nevertheless, shipments for the combined companies were down more than 12% year on year, reflecting merger challenges in a competitive market and limited immediate impact from Gateway's recent channel agreements.

— Acer – Acer remained very aggressive in EMEA, with growth of more than 50%. The company also performed well in other international markets, although its relatively small base in the United States continued to erode.

Top 5 Vendors, Worldwide PC Shipments, Third Quarter 2004


(Units Shipments are in thousands)

Q3 2004 Q3 2004 Market Q3 2003 Market Growth

Rank Vendor Shipments Share Shipments Share 2004/2003


1 Dell 8,051 18.2% 6,670 16.9% 20.7%

2 HP 7,151 16.2% 6,555 16.6% 9.1%

3 IBM 2,646 6.0% 2,272 5.8% 16.4%

4 Fujitsu/

Fujitsu Siemens 1,729 3.9% 1,563 4.0% 10.7%

5 Toshiba 1,609 3.6% 1,381 3.5% 16.5%

Others 23,010 52.1% 21,052 53.3% 9.3%

All Vendors 44,197 100.0% 39,492 100.0% 11.9%


— Shipments include shipments to distribution channels or end

users. OEM sales are counted under the vendor/brand under

which they are sold.

— PCs includes Desktop, Notebook, Ultra Portable, and x86 Servers.

— PCs do not include handhelds. Data for all vendors are reported

for calendar periods.

Source: IDC, October 18, 2004

Top 5 Vendors, U.S. PC Shipments, Third Quarter 2004 (Preliminary)

(Units Shipments are in thousands)

Q3 2004 Q3 2004 Market Q3 2003 Market Growth

Rank Vendor Shipments Share Shipments Share 2004/2003


1 Dell 5,023 32.8% 4,396 30.9% 14.3%

2 HP 3,128 20.4% 3,084 21.7% 1.5%