News Blog

Worldwide PC shipments are on pace to grow 15.2 percent in 2008, according to IDC. That's above the analyst firm's March prediction of 12.8 percent growth. But laptop shipments, which have become an increasing force in the PC market, will peak.

Shipments of portable PCs should grow 34.5 percent this year, according to a PC shipment tracker that IDC released this week. That's up from 33.9 percent in 2007 and way above the projected 13.4 percent for next year. By 2012, according to the firm, portables will increase by only 9 percent.

PC makers such as Hewlett-Packard are betting big on notebooks. The company this week released 17 new models, mostly for consumers.

(Credit: Hewlett-Packard)

By the end of the year, PC makers will have shipped 310 million units, close to half (145.1 million) of which are notebooks. The rest are desktop PCs and servers, which together on a global basis still comprise the largest slice of the market, but the difference is disappearing fast.

Portables are especially expected to take off internationally this year, growing from 78 million in 2007 to 109.4 million units this year. That's good news for the industry because notebooks and laptops tend to be pricier than desktop PCs, and they should keep average selling prices higher for a bit longer.

But inexpensive notebooks are stirring up the market too. A reason for the dramatic 40 percent bump in international portable shipments has a lot to do with how the numbers have been counted, according to IDC.

The firm said it had previously not included the rapidly growing low-cost mininotebook segment because of the "use of nontraditional PC designs, including the use of embedded or custom operating systems, (as well as) reduced processing power and storage," IDC said. But now, due to the popularity and computing robustness of the Asus Eee PC, the Classmate PC platform from Intel, and OLPC's XO, mininotebooks are included. Plus, the firm notes, the volume of units shipped are actually rising.

Those three manufacturers have some company in the consumer space. Acer, Hewlett-Packard, and perhaps Dell already have, or plan to release, their own tiny laptops.

The U.S. PC market is beginning to have less influence on the global market, according to IDC's Worldwide Quarterly PC Tracker.

Though it had previously projected 7 percent growth for the U.S. market, shipments inched up 3.5 percent, half what IDC was anticipating.

The fascination with low-cost portable PCs, like the Asus Eee PC pictured here, is driving down the cost of PCs everywhere.

(Credit: Erica Ogg/CNET News.com)

"The main issue is the economic situation in the U.S.," said Doug Bell, PC analyst for IDC. "It was the only region really impacted by the recession scare." Corporate IT budgets are showing that cautious approach, he noted. Spending on IT hardware is being delayed to the second half of this year or early next year, or at least tightened. Though Microsoft finally released Vista Service Pack 1 this quarter, it had less of an impact than anticipated, but could begin to convince businesses to upgrade next quarter.

The worldwide market is a different story. In the first quarter of 2008, shipments of PCs actually exceeded expectations, growing 14.6 percent to roughly 70 million units. That's two percentage points higher than anticipated.

Increased growth in the EMEA region (Europe, Middle East, and Africa) compensated for the U.S. shortcomings, however. Like the U.S., buyers in the region are moving toward more inexpensive portable PCs, particularly in emerging markets where many consumers are making their first PC purchase.

In good news for buyers, the average selling price of PCs is continuing to drop, due to the new market of low-cost PCs, like the Asus Eee PC and Everex Cloudbook. The volume of low-cost PCs shipping is still minimal, but it's growing. "With all major vendors putting resources into low-cost PCs, we're just starting to see a handful of offerings," said Bell. "It's unclear how large that market actually is because we really only have one or two products to base it on."

The world's top 5 PC vendors remained in their same positions (HP, Dell, Acer, Lenovo, and Toshiba), and all grew faster than the total market. Hewlett-Packard grew 17.4 percent, but that was the lowest growth rate of the top 5. Dell, which is in the midst of a comeback since its disastrous 2007, saw its shipments rise 21.6 percent over last year, while Acer was once again the growth leader at 66 percent. This is the second quarter in which its purchase of Gateway and Packard Bell have counted toward its total shipments, and the combined company's total actually resulted in a 20 percent drop from the same quarter a year ago, which IDC said is due to weaker Gateway-branded products.

It looks like Dell is beginning to get its ducks in a row, as this is the second straight quarter the Texas PC maker has shown positive growth. "To have this kind of growth in the U.S. is a good sign for them. It points to their new retail strategy and overall shift toward portables," said Bell.

As far as market leader HP, its impressive growth of the last year has been tempered slightly by market conditions. "They had such a great 2007, the economy kind of caught up to them. HP is a great example of (what's happened to) the U.S. PC market due to the economy."

Despite some anticipation of weakening U.S. consumer confidence, PC shipment growth here nearly doubled between the third and fourth quarters of 2007, to reach 8.8 percent, according to IDC's Worldwide Quarterly PC Tracker report released Wednesday.

Dell actually expanded its market share in the fourth quarter, after a string of disappointing quarters while it reshuffled its ranks and its product lineup. Dell used momentum derived from its new retail push to drive its shipments up by more than 15 percent in the quarter--growth far ahead of the rest of the U.S. The Texas PC maker finished the year with 29.6 percent of the total PC market in the U.S. in the fourth quarter, IDC said.

"From a Dell perspective, part of going from minus-5-percent to 15-percent positive (growth) this quarter is the fact that year-ago shipment was pretty low," said Loren Loverde, director of IDC's quarterly PC report. "So some of that is factoring in, but they have also launched a lot of new products, and lot of new (retail) channel arrangements."

Acer also made a big push in retail this year, continuing the rapid gains in the U.S. (it's grown 294 percent since the same quarter a year ago), and appears to have finally nailed down its coveted No. 3 spot in the worldwide ranking of top PC vendors. When combined with Gateway, Acer shipments achieved 9.6 percent share worldwide in Q4, compared with 6.9 percent a year ago.

Though Lenovo has been nipping at its heels, Acer's most direct competition in the U.S. is the two big guys--Hewlett-Packard and Dell. "HP has a lot more experience with consumers and is going to try to defend that turf. It's a pretty dynamic competitive space all around," Loverde said.

HP, the worldwide PC leader for more than a year now, saw its shipments rise both at home and abroad, though it was somewhat affected by stagnating growth in Europe, the Middle East, and Africa, according to IDC. It now has 19 percent of the worldwide market.

Lenovo has been going strong for three straight quarters. It ended the year behind Acer with 7.5 percent of worldwide PC shipments. It's not in the top 5 of vendors in the U.S. market, but recently introduced its new IdeaPad consumer notebook line, which the company hopes will follow in the tradition of its business-oriented ThinkPad line of laptops.

Rival analyst firm Gartner ranks the companies in the same order as IDC, according to findings also released Wednesday: the worldwide leader is HP (with 18.2 percent market share), followed by Dell (14.3), Acer (8.9), Lenovo (7.4), and Toshiba (4.0) to round out the top 5.

In the U.S., it's Dell (31.4 percent market share), HP (26.1), Acer (9), Apple (6.1), and Toshiba (5.3). Apple has stretched its share of the U.S. market to 6.1 percent, from 5.1 percent a year ago. Gartner also notes that for the second consecutive quarter mobile PC shipments exceeded those of desktops.

Though the market for computers--and both business and consumer technology across the board--appears healthy, it could drop off next year. But thus far, there are no signs of it in the PC space.

Though there's been ample hand-wringing over interest rates, credit problems, and weak retail sales, the computing industry is staying immune so far, according to Loverde.

"There's some risk of having an impact on PCs, but a certain amount of it is because we just went through the holiday season and Wall Street is under pressure," he said. "If you look at the broader technology trends...some recovery in 2007, commercial Vista adoption, pretty strong portable (PC) adoption, (and) we're still getting lower prices and new users...A number of tech environment factors that suggest we should expect still some pretty solid growth. The risk that we might not maintain double digit growth in the next couple years would be if we had a recession and consumer spending really started to cut back."

Shipments of PCs to the saturated U.S. market may be declining somewhat, but the EMEA region (Europe, Middle East, Africa) gave the worldwide PC market a big boost in the third quarter, according to figures released Wednesday by IDC.

PC shipments grew 15.5 percent worldwide in the past quarter. Growth in the EMEA regions, led by Hewlett-Packard and Acer, was paced by a strong demand for notebooks and back-to-school promotions, leading to the best growth rates in the region in the past two years.

"The issue is that it continues to be notebooks that are driving strong growth for the overall market. It's happening on the consumer and enterprise sides," said Bob O'Donnell, IDC vice president for clients and displays. "Consumers increasingly are voting for notebooks."

HP continued to stretch its lead over rival Dell as the No. 1 PC maker in the world. HP's slice of the global PC vendor pie now stands at 19.6 percent, keeping Dell in second place with 15.2 percent. It was exactly a year ago when HP toppled Dell as the top dog of the PC world. Since then, HP's growth has continued apace, while Dell has struggled. But the Round Rock, Texas, PC maker appears to be turning things around.

For one, Dell, which is overrepresented in sales to U.S. customers, is starting to spread its business to a variety of geographic regions, something CEO Michael Dell acknowledged at an investor conference earlier this year.

"Now they're starting to reap some benefits," said O'Donnell. "Call it a turnaround or call it a readjustment, but they're starting to get their ships in order and get things back on track. But they still have a ways to go."

Case in point: Though Dell made some good gains in shipment volume growth in the past year, it was the only of the top five PC vendors to lose worldwide market share from a year ago. After HP and Dell, IDC says the top vendors are Lenovo (8.2 percent), Acer (8.1 percent) and Toshiba (4.4 percent). Rival analyst firm Gartner places Acer (8.1 percent) slightly ahead of Lenovo (8.0 percent) in its rankings.

Acer had made some monstrous gains in quarters past, and though the third quarter was still very healthy--with an industry-leading 60 percent growth in shipments over the last year--its rate of growth shows signs of slowing.

"The volume was down sequentially for Acer. That signifies that they've hit a bit of a wall in terms of U.S. growth," said O'Donnell. "A lot people thought that would happen. It's a different animal in the U.S. where (success is determined by) retail shelf space."

So while Acer continues to grow, nobody in any industry can keep up that type of pace. The addition of Gateway and Packard Bell to its arsenal should provide more opportunities to grow, but the impact of the two acquisitions likely won't be felt for several quarters, O'Donnell said.

Here in the U.S., overall PC shipments grew a scant 5.2 percent since the same quarter last year. Desktop shipments continued to decline, and while notebook shipments did grow, they didn't quite match last quarter's numbers, said IDC.

Dell maintained its lead in the U.S., but HP continues to lurk closely behind. Dell's U.S. share is 28 percent, followed by HP with 24.3, Apple with 6.3, Toshiba with 5.2 and Gateway with 4.8 percent. Gartner's data ranks the vendors the same, but gives Apple an 8.1 percent share and also bumps Gateway up slightly to 5.2 percent.