December 7, 2000 4:00 AM PST

Computer sales worldwide still healthy, IDC asserts

Although consumer PC sales are free-falling in the United States, shipments of computers worldwide will still grow nearly 20 percent this quarter compared with the same period last year, according to a new study.

This seemingly contradictory state of affairs comes as a result of the widely diverging fates of certain sectors of the market, according to data released Thursday from market researcher IDC.

With U.S. consumer PC sales down as much as 30 percent this holiday season and with earnings warnings from Apple Computer and Gateway, some prognosticators have been singing a dirge for the PC.

But solid worldwide demand for portables will help counterbalance the sluggish U.S. consumer PC market, IDC says. According to the research group, worldwide portable shipments were up 33 percent in the third quarter compared with the same period last year and will be up 32 percent in the fourth quarter.

IDC also expects outstanding growth in the Asia-Pacific region. Excluding Japan, shipments in the region are expected to be up 33.4 percent in the fourth quarter. In Japan they'll be up 29.4 percent.

In its report, IDC revised its worldwide projections for consumer PCs only slightly. Its original estimates were for 20.3 percent unit growth in the fourth quarter from last year. IDC now predicts a 19.6 percent gain year over year.

Overseas sales have become increasingly important to U.S. PC makers. The second quarter was the fourth in a row in which foreign markets grew faster than the U.S. market. To capitalize on the trend, Hewlett-Packard and other manufacturers are fine-tuning strategies and building overseas factories to get around tariffs and other issues.

Projections cut
As for worldwide PC unit shipments for both consumers and businesses, IDC is expecting 19.8 percent growth in the fourth quarter vs. last year and 19.6 percent growth from the third quarter to the fourth quarter.

Click here to Play

PC sales worldwide still healthy
Roger Kay, analyst, IDC
In the United States, the market researcher predicts 15.8 percent fourth-quarter growth in overall PC shipments compared with a year earlier but a paltry 11 percent gain from the third quarter.

IDC analyst Roger Kay said a warming in the U.S. corporate PC sector "weighed against the obvious decline we've seen in consumer desktops in the fourth quarter."

Still, U.S. consumer PC sales in the fourth quarter are expected to be "disastrous," Kay said. IDC cut its original fourth-quarter projections about 10 points, from 21.2 percent year-over-year growth to 10.2 percent.

"That works out to about 500,000 units less than original projections," Kay said.

While the fate of the U.S. consumer PC market looks shaky--with some analysts saying seasonal sales peaks are dead--the corporate market still looks bright. IDC predicts that upgrades of systems bought in 1997 and 1998 and a big increase in Windows 2000 sales will lift the business market next year.

Other analysts concurred.

"I don't think the PC is dead," said Robertson Stephens analyst Eric Rothdeutsch. "Strong sales of Windows 2000 should buoy PC sales during the second half" of next year.

In fact, market researcher Gartner in February projected that between 15 percent and 20 percent of Windows 95 and 98 systems would be upgraded to Windows 2000 this year. Gartner has since revised expectations to less than 10 percent. Conversion next year is predicted to be 45 percent or more.

Some ugly news
Continued sluggishness in Europe, in part because of the dollar's performance against the euro, compelled IDC to cut its fourth-quarter projections there to 15.1 percent year over year, down from its previous estimate of 19 percent.

While projections are by no means as bad as they could have been, IDC still delivered some ugly news. The market researcher cut its worldwide 2001 PC estimates to 16.6 percent growth over 2000, down from its previous projection of 18.8 percent. But the United States could see some reinvigorated demand in 2001.

"The long-term growth resumes in 2001 but at an ever-slowing pace, which reflects market saturation," Kay said. "We will get into the single digits the next couple of years, and then it doesn't rise again in our forecasts."

IDC also released its final tally on third-quarter PC performance, placing Compaq Computer in the top position worldwide and Dell Computer as No. 1 in the United States, as expected.

Worldwide, Compaq easily led Dell. Compaq had 14 percent market share, compared with Dell's 11.6 percent. Compaq also posted stronger unit growth, at 21 percent, compared with Dell's 19 percent.

But HP outpaced the bunch with its unit shipments growing at 40.5 percent. HP also moved up a notch from fourth place, displacing IBM. HP's market share came in at 7.8 percent, compared with IBM's 7.3 percent. IBM's shipments grew 8 percent, while fifth-ranked Fujitsu-Siemens dropped six-tenths of a point to 4.8 percent market share.

Dell led Compaq in the United States, with 19.7 percent share vs. 17.3 percent. But Compaq posted stronger growth, 25.3 percent compared with Dell's 21.6 percent. HP again ranked third, with 11.1 percent share, and posted the strongest growth, coming in at nearly 47 percent.

Gateway fell to fourth place with 8.9 percent share, while IBM rounded out the top five with 5.7 percent market share. Gateway's unit shipments grew 7 percent, but IBM's plummeted nearly 20 percent.

See more CNET content tagged:
consumer PC, shipment, market research company, projection, Gartner Inc.

 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.