Portable PC Adoption Accelerates, Lifting the Market Despite a Conservative Outlook for the United States, According to IDC

FRAMINGHAM, MA – JUNE 12, 2007 – Worldwide PC shipments are projected to rise 12.2% in 2007 to 256.7 million, according to IDC's Worldwide Quarterly PC Tracker. The latest figures reflect a 28% year-on-year increase in Portable PC volume, up from 25% over the prior three quarters. Desktop shipments also beat expectations for the first quarter, raising the short-term outlook.

This update increases projections for 2007 by more than a percent from a March forecast of 11.1%. Although projections for 2008 growth were lowered slightly from 11.3% to 10.8%, the stronger short-term outlook means that volumes have been raised throughout the forecast. Total shipments are now projected to reach 284.4 million in 2008 and 356.7 million in 2011, up from 281.3 million and 350.9 million, respectively.

Despite the improved outlook for Portables and overall shipments, Desktop growth and volume were lowered for 2008 and beyond. The medium-term outlook for the United States was also reduced in light of slow enterprise purchasing.

"The rate of Portable PC adoption continues at a surprising pace and is a great sign of market strength," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker. "While the strong first quarter and improved outlook for 2007 coincide with the release of Vista, aggressive competition for the low-cost Portables market seems to be the primary driver. It's clear that there was a change in momentum with the new year, and some of that must be attributed to the launch of Vista. However, slow Desktop demand and a conservative outlook for commercial upgrades reinforce our view that future replacements and Vista adoption will be spread over several years and not concentrated in 2008 and 2009."

"Despite solid growth in portable PC shipments, the slump in the commercial desktop market continues, dragging down the overall U.S. PC market," said Bob O'Donnell, vice president, Clients and Displays at IDC. "We expect portable PC shipments to maintain double digit growth rates for the next few years, as demand for mobility continues to shift new buyers from desktops to notebooks."

PC Shipments By Region And Form Factor (in Millions), 2005-2009

FORM

REGION FACTOR 2005 2006 2007(a) 2008(a) 2009(a)

——————————– —— —— ——- ——- ——-

Desktop &

x86

USA Server 42.3 39.4 38.1 34.8 32.0

Portables 21.6 26.1 31.9 37.3 42.3

——————————– —— —— ——- ——- ——-

USA Total 63.9 65.5 70.0 72.1 74.4

——————————– —— —— ——- ——- ——-

Desktop &

x86

International Server 100.5 106.8 113.3 121.6 128.8

Portables 43.7 56.5 73.4 90.7 106.1

——— —— —— ——- ——- ——-

International Total 144.2 163.4 186.7 212.4 234.9

——————————– —— —— ——- ——- ——-

Desktop &

x86

Worldwide Server 142.7 146.2 151.4 156.4 160.8

Portables 65.4 82.6 105.3 128.0 148.4

——— —— —— ——- ——- ——-

Worldwide Total 208.1 228.8 256.7 284.4 309.2

——————————– —— —— ——- ——- ——-

(a)Forecast data

PCs include Desktop, Notebook, Ultra Portable, and x86 Server and do not include handhelds.

Source: IDC Worldwide Quarterly PC Tracker, June 2007

PC Shipment Growth By Region And Form Factor, 2005-2009

FORM

REGION FACTOR 2005 2006 2007(b) 2008(b) 2009(b)

———————————- —– —– ——- ——- ——-

Desktop &

x86

USA Server 1.4% -6.8% -3.4% -8.6% -8.0%

Portables 30.1% 20.7% 22.2% 16.8% 13.6%

———————————- —– —– ——- ——- ——-

USA Total 9.6% 2.5% 6.8% 3.0% 3.2%

———————————- —– —– ——- ——- ——-