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RealTime IT News

U.S Slips To Third In Worldwide PC Market

Worldwide PC shipments rose by 8.9 percent in first quarter of 2007, but for the first time, the U.S. market slipped to third place as the rest of the world's growth continued at a rapid pace.

IT research firm Gartner said a total of 62.7 million PC units were sold in the first quarter of 2007. The region known as EMEA, or Europe/Middle East/Asia, accounted for 21.6 million units, an increase of 13.7 percent. Eastern Europe and the Middle East were particularly strong.

The number two market was Asia/Pacific, with 15.7 million units sold, a 10.3 percent increase over the first quarter of 2006. This was the first time that Asia/Pacific surpassed the U.S. The overall market performance was slightly weaker than projected due to weaker desktop PC growth, and China was softer due to Lunar New Year celebrations.

The U.S. grew 2.9 percent to 14.8 million units sold. Charles Smulders, vice president of the client computing group at Gartner, said overall, the quarter was pretty much in line with expectations. "Obviously there was a slow beginning to the year as the market waited for Vista," he told internetnews.com. The U.S. remain slow because it's a mature market and there was a major refresh cycle in the last two years, he added.

Hewlett-Packard led the quarter with worldwide unit shipments of 11 million, for 17.6 percent share of the quarter and year-over-year growth of 28.7 percent. Dell was a distant second with 8.7 million units sold for 13.9 percent quarterly share and a 7.8 percent drop over 2006 numbers.

"[Dell] is clearly a company at the beginning of a major restructuring," said Smulders. "I think they recognize that their direct sales model doesn't bring them the competitive advantage they had in the past and they are putting in place a new strategy to reinvent themselves, but it's a long-term strategy, so we shouldn't expect anything in the short term."

In addition to its international shipments, Dell isn't doing well domestically. Only 15 percent of its sales came from consumers, and that area is growing faster than business, said Smulders. He attributed the poor consumer sales to "issues with their reputation for poor support, which has had a negative effect on purchasing."

Acer moved into a firm number three position, with 4.2 million units sold for 6.8 percent quarterly market share and an impressive 46.1 percent growth. Lenovo was fourth with 3.9 million units sold for 6.3 percent of the quarterly sales and 16.1 percent growth and Toshiba was fifth with 2.5 million sold for 4.1 percent of the quarter's sales and 15.3 percent growth.

Despite its continued decline, Dell is still tops in the U.S. in market share, but only just. It had 27.9 percent of U.S. sales to HP's 25.7 percent. Gateway was third with 7.7 percent, Toshiba was fourth thanks to ever-increasing laptop popularity in the U.S. with 5.4 percent and Apple was fifth, with five percent. Apple's numbers are preliminary, with final numbers due next week, but if the sales figures hold up it will be a 30 percent growth over Q1 2006.

Smulders said the quarter was an improvement for Lenovo because it's finally finding its legs after the IBM PC business acquisition. "They needed to create greater independence from IBM, because today they are too reliant on IBM's infrastructure and sales force. The faster they can move away from that position and create their own sales channels and infrastructure, it will be good for that company."



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