RealTime IT News

PC Growth Rates Takes a Dip

PC sales are slowing a bit faster than expected leading research firm IDC to revise its figures downward.

In a report released earlier this week, IDC estimates worldwide shipments increased only 9.7 percent from the same quarter a year ago. IDC had earlier forecast PC growth of over 10 percent for the next several years.

Overall, PC sales were strong but for a few areas, primarily Europe. Broad interest in the World Cup soccer matches hurt sales throughout Europe where the increase for the quarter was only about 7 percent compared to a year ago. IDC had forecast 12 percent growth in Europe for the quarter.

PC shipments in the United States increased by 6.7 percent but IDC said that was a good result following slower sales the previous two quarters. Sales were slightly ahead of IDC's forecast.

"Manufacturers in the United States were very assertive in the second quarter and used low prices and portable adoption to collectively reverse sluggish growth trends from the previous six months," said Richard Shim, senior analyst with IDC's Personal Computing program.

"HP,  Apple,  and Gateway led the charge with double digit growth rates outpacing the industry average. Dell  slightly lagged the market while maintaining its leadership position by a wide margin."

IDC took note of Apple's successful transition to Intel  processors. While still holding only a small percentage of the overall market, Apple grew by double digits in the second quarter following a slow first quarter. Strong portable PC sales through its retail outlets had a significant impact: retail grew by 50 percent and portables by over 60 percent year over year.

In its earnings released yesterday Apple noted Mac shipments of 1.3 million were better than expected.

In the U.S. Apple holds fourth place in PC shipments with a 4.8 percent share just ahead of Lenovo at 4.0 percent, according to IDC. Dell and HP dominate the top two spots with a 34.2 and 20.1 share, respectively. Gateway is hanging on to 6.5 percent.

On a worldwide basis, Dell holds a much smaller 19.2 share, followed by HP with 15.9 percent and Lenovo, Acer and Fujitsu/Fujitsu Siemens all with a single digit share.

"We continue to see aggressive competition as the market transitions to a new phase," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker.

"In addition to changing regional dynamics, we can expect to see heightened competition in the second half of the year as companies vie for growth. Aggressive competition between processor vendors and the delayed release of Windows Vista will contribute to the changes vendors face entering the next cycle in the PC market."