IDC forecasts robust worldwide Q2-99 PC demand with 21.3% growth YOY.
Hi Kemble:
Here is what IDC says about Q2 1999.
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IDC Forecasts Robust Worldwide Q2 1999 PC Demand with 21.3% Unit Growth over Q2 1998
Japan Seen Posting Highest Growth Rate for Quarter
FRAMINGHAM, Mass, June 8, 1999 - Unit volume in the worldwide PC market this quarter is expected to grow 21.3% year-over-year, according to data released today by International Data Corporation (IDC). Following a stronger than expected first quarter 1999, volume in Q2 will decline slightly by 2.3% from Q1 1999. Strong global consumer demand led by the surging Japanese market and healthy U.S. buying will continue to drive growth in the second quarter.
Japan, which expanded faster than any other major market in Q1 (nearly 30%), is showing no signs of letting up. The traditionally strong first quarter of the Japanese fiscal year, an increase in Internet demand, and consumer interest in PCs should all factor into projected Q2 year-over-year growth of 36%.
The rebounding Asia/Pacific region and Western Europe are also expected to be strong growth contributors during the current quarter. Strong consumer markets in the United States, Western Europe, Japan as well as many other parts of the Asia/Pacific region are leading the Q2 worldwide market. In the United States, IDC expects slight sequential growth of 3.5% over Q1 1999, up to 10.3 million units, which represents a hearty year-over-year growth rate of 28%. This growth estimate follows a first quarter of 24.7% year-over-year market growth.
The desktop market will continue to expand with the emergence of more "nearly free" PC distribution schemes and competitive jockeying at the low end. "The downward migration of prices has continued to heat up consumer demand," said John Brown, IDC research manager of Worldwide Quarterly PC Tracking. "At the same time it has strained vendor margins as revenues continue to stagnate."
Consumer interest in inexpensive PCs, the Internet, and a sound economic picture will continue to drive the Western European market to Q2 year-over-year unit growth of 13.7%, with sequential volumes down a seasonally normal 3.5%.
The Asia/Pacific (excluding Japan) rebound is in full swing as second-quarter growth is expected to reach 22.6% over the same period last year. China, India, and Australia continue to perform well, and Korea has shown the biggest recovery so far in 1999 with 51% growth in the first quarter. IDC expects the current economic recovery in Korea to lead to rapid market expansion this quarter as well.
Although the Asia/Pacific market is on track for a major comeback, concerns are still in order in the region, as its growth has become very dependent on the availability of low-cost desktops. Political unrest in India, Indonesia, and Malaysia as well as worsening relations between China and the United States could also inhibit future growth.
Vendors
IDC believes the key to vendor growth this quarter is related to strategic alignment with growing consumer and small business segments and a strong line of portable products. Additionally, positioning in the Western Europe, U.S., and Asia/Pacific markets will be important.
Finally, solid Internet strategies will also be key for growth. Vendors that appear well positioned for the quarter are Dell, Gateway, IBM, and Apple. Dell, Gateway, and IBM have placed increasing emphasis on the small and medium business markets, pushing specialized programs and products specifically designed to meet the needs of this segment. Apple, with an upgraded notebook product and volume increases in overseas markets, should grow above the market average. HP is also showing signs of improving its volume position. |
