Rising Demand Bodes Well For Year-End PC Sales While Long-Term Outlook Changes Little, According to IDC

FRAMINGHAM, MA – SEPTEMBER 8, 2003 – Worldwide PC shipments beat expectations in the second quarter, rising to 33.9 million units on growth of 9.6% according to IDC's Worldwide Quarterly PC Tracker. The strong second quarter reflected resilient consumer and public sectors responding to aggressive pricing and strong mobile demand on top of a more gradual increase in business demand. The results boosted projected 2003 growth to 8.4% from prior expectations of 6.3% while 2004 growth was lowered slightly from 10.3% to 10.2%. Shipment value is expected to fall by 1.9% in 2003 to $171.7 billion and grow by 2.1% in 2004, reflecting the impact of aggressive pricing on shipment value.

"Continued consumer spending is great for the market," said Loren Loverde, director of IDC's Worldwide Quarterly PC

Tracker. "Nevertheless, it was supported by short-term factors like a weak dollar and a limited impact from SARS, and it conceals the slow recovery in business spending. In terms of segment mix, we may see slightly more consumer demand and less business spending for the rest of 2003 than previously expected, but we believe overall market conditions merely shifted demand into Q2 rather than significantly boosting long-term demand."

Regional Outlook:

United States – The U.S. market was stronger than expected, but largely due to federal government spending and consumer demand rather than business spending. Going forward IDC expects business spending to continue to improve and consumer spending to remain strong in the back to school and holiday shopping seasons, so that as government spending wanes the overall market will continue to improve.

Western Europe – Western Europe had a very strong quarter driven by further acceleration of the portables market and a general boost from a strong Euro. While economic conditions in key markets continue to pose challenges and currency factors may diminish, aggressive pricing and notebook adoption are expected to continue to drive shipment growth in the region.

Japan – While second quarter shipments beat expectations and pushed growth into positive territory for the first time in 8 quarters, IDC believes 2Q02 business spending reflects budget constraints that may hinder demand later in the year. Nevertheless, with reduced fear of SARS and some optimism regarding the economy, IDC has raised its growth forecast for 2003 to low single digits rather than a slight decline.

Asia/Pacific – The Asia/Pacific PC market sustained double-digit growth in the second quarter despite fears that SARS would disrupt business and lead to significant losses. While SARS was a significant factor early in the quarter, the market responded quickly to containment efforts and picked up significantly in June, including many large PC projects. Despite the hurdles, regional growth was on par with the first quarter at just over 12% and should sustain that pace through the end of the year.

U.S. and Worldwide PC Shipments and Growth, 2000-2004

Region/Sector 2000 2001 2002 2003 2004*

USA Units (M)

Consumer 19.3 15.5 17.0 18.9 20.8

Commercial 32.7 30.5 30.5 32.1 35.4

Total 52.0 46.1 47.5 51.0 56.2

Worldwide Units (M)

Consumer 52.6 47.7 49.2 53.3 58.5

Commericial 87.6 87.0 87.6 94.9 104.9

Total 140.2 134.7 136.7 148.2 163.3

USA Growth (%)

Consumer -19.6% 9.6% 10.7% 10.2%

Commercial -6.6% -0.1% 5.3% 10.2%

Total -11.4% 3.2% 7.2% 10.2%

Worldwide Growth (%)

Consumer -9.3% 3.1% 8.4% 9.7%

Commercial -0.7% 0.7% 8.4% 10.5%

Total -3.9% 1.5% 8.4% 10.2%

Shipments are in millions of units.

*Forecast data.

Source: IDC, September 2003

IDC's Worldwide Quarterly PC Tracker gathers PC market data in 55 countries by vendor, form factor, brand, processor

brand and speed, sales channel and user segment. The research includes historical and forecast trend analysis as well as price band and installed base data.

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Additional information can be found at www.idc.com.

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