biz.yahoo.com
Monday January 24, 12:01 am Eastern Time
Q4 PC market grew 17 pct as industry shrugs off Y2K
By Eric Auchard
NEW YORK, Jan 24 (Reuters) - Personal computer shipments grew at least 17 percent worldwide in the fourth quarter, as seasonal consumer sales strength helped the industry dodge slowing business PC sales tied to Year 2000 computer fears, market researchers said in surveys to be issued on Monday.
Analysts at research firms Dataquest and International Data Corp. said PC markets can maintain this pace in 2000 if prices fall further, especially in business PC markets, and consumer demand for new PC models pick up in already-saturated markets.
``The dynamic that is operating in the industry is that unit growth will only continue at these levels if average systems prices continue to fall,' said Charles Smulders, analyst at San Jose, Calif.-based Dataquest, a unit of Gartner Group (NYSE:IT - news).
Smulders predicts that the growth in shipments of PCs will slow from 21.7 percent in 1999 to around 18 percent during 2000 unless price-cutting that swept through consumer markets during 1999 reaches deeper into the business PC market this year.
The PC market grew 17 percent in the fourth quarter of 1999, compared to the year-earlier period, Dataquest said.
International Data Corp. (IDC), another technology market researcher based in Framingham, Mass., found that the worldwide market for PCs during the fourth quarter in 1999 grew slightly faster at 19 percent compared to the same year-earlier quarter, but also forecasts a slowing growth in shipments in 2000.
Both surveys rely on factory shipment estimates from vendors of desktop and portable personal computers.
Divergences in figures between the two surveys can be explained partly by differences in what the market research firms count as a PC. IDC counts servers, or PCs used to manage other computers, and some workstations; Dataquest does not.
Business PC sales slowed late in 1999 as some companies focused on repairing potential Y2K bugs in existing equipment instead of buying new machines. PC makers shifted their focus to tap consumer PC demand and took measures to boost sales of related PC gear like software, printers and Internet access.
Worldwide volume fourth-quarter growth was led by strong results in the Asia/Pacific region, which was rebounding from the economic crisis it endured a year ago to grow 38 percent.
For the 1999 year as a whole, tumbling average prices, healthy consumer demand worldwide and record volume in Asia helped fuel global growth of 23.3 percent as PC makers shipped 112.7 million PCs during the year, IDC said.
IDC analyst John Brown said the first half of 2000 will see difficult comparisons versus the booming 1999 first and second quarters, when PC sales exploded in preparation for Y2K and the so-called ``free' or nearly free sub-$299 PCs hit the consumer market.
``We are not seeing any PC demand driver of that magnitude this year,' Brown said.
Instead, he predicted a return to the seasonal patterns that have held true for much of the past decade: After a busy year-end holiday season, first quarter sales soften, then slip to their lowest levels in the second quarter. And they regain momentum in the third and especially fourth quarter, typically the biggest selling season of the year.
Still, IDC believes PC shipments will grow 18 percent in 2000, he said, well above Dataquest's 13 percent estimate.
Dell Computer Corp. (NasdaqNM:DELL - news) extended its lead over Compaq Computer Corp. (NYSE:CPQ - news) for the No. 1 spot in the U.S. market, the world's largest, and gained against Compaq in the world market, where Compaq kept a nearly 4 percentage point lead.
Compaq, which grew 8 percent in the fourth quarter from the year-earlier period, shipped nearly 4.6 million PCs worldwide, against Dell's 3.6 million, which grew 45 percent, IDC said.
During the 1999 year as a whole, Compaq built 15.7 million PCs, a 14 percent share of the market, versus Dell's 11.9 million PCs, which amounted to a 10.5 percent share, up from a 8.5 percent share a year ago.
Fast-growing Dell has capitalized on Compaq's struggle to trim product inventory and match the advantages of Dell's direct sales and distribution, helping propel Dell to take the lead in U.S. PC shipments for the last two quarters of 1999 industry experts say.
Meanwhile, Hewlett Packard Co. (NYSE:HWP - news), No. 3-ranked in the U.S. market, grew 68 percent in the fourth quarter compared with a year ago, fastest among major vendors. Globally, H-P's rapid growth put it neck-and-neck with International Business Machines Corp. (NYSE:IBM - news) for the No. 3 spot, both surveys said.
Dataquest said Hewlett benefited by the exit of IBM from the U.S. retail PC market during the fourth quarter and the general withdrawal from the U.S. market by Packard Bell NEC, the one-time king of retail consumer PC sales in the market.
IBM saw its U.S. growth decline 29 percent during the fourth quarter as the PC pioneer sought to shift consumer PC sales from stores to the Web and redoubled its focus on its still healthy notebook and server computer businesses.
NEC's strength in European and Asian markets helped it retain its No. 5 spot, despite a 3 percent drop in year-to-year growth, ahead of fast-gaining No. 6 Apple Computer Inc. (NasdaqNM:AAPL - news), which regained its status among top PC makers worldwide amid surging consumer sales, Dataquest said.
But IDC's survey of PC shipments found that Fujitsu Siemens Computers, a leading European PC maker, captured the No. 5 position in terms of worldwide market share.
The company is a joint venture of Germany's Siemens AG and Japan-based Fujitsu Ltd.'s European unit. |
