Asia and Latin America Lead PC Sales Surge
nytimes.com
By CHRIS GAITHER
The personal computer industry continued its torrid pace of worldwide growth in the third quarter, according to two reports scheduled to be released today.
But growth has slowed in the United States, Canada and Europe, as those regions show increasing signs of market saturation. One of the reports indicates that the United States market may have slipped below double-digit percentage growth for the first time since 1994, when the Internet boom began and the data were first tracked.
Fueled by heavy entries into developing markets in Asia and Latin America, worldwide PC sales in the quarter ended Sept. 30 met the expectations of the International Data Corporation and Gartner Dataquest, two market research firms.
Both firms estimated worldwide sales of more than 33 million units, though their percentage growth figures differed. International Data, based in Framingham, Mass., estimated that sales grew 18.3 percent from the comparable period last year, while Gartner, based in San Jose, Calif., reported 15.2 percent growth.
The bad news came in the United States, Canada and Europe, where analysts said saturation has set into the PC market. International Data estimated that the United States market grew only 9.4 percent, largely because of lethargic PC sales to corporations. Gartner estimated United States growth at 12.2 percent, and predicted a rough current quarter and coming fiscal year.
"Clearly, we've reached a stage in the market where many of the people who need a PC already have one," said Charles Smulders, principal analyst at Gartner. "The PC vendors need to have a different approach to the way they bring products to market and interact with users."
Mr. Smulders said consumers should benefit from price cuts in the fourth quarter, as PC-makers try to clear out inventory.
"The question for vendors is how to bridge the fourth quarter," Mr. Smulders said.
Gartner expects a rebound beginning late next year and blossoming in 2001, as corporations replace their fleet of desktop computers. The firm's research shows potential for a stellar growth rate of 25 percent in the United States in 2001, and a "major upgrade cycle in both the European professional and home markets," the report said.
Mr. Smulders said, "Being able to predict the ebbs and flows of these replacement cycles is to become much more important in predicting the earnings of these PC vendors."
Drawing sweeping conclusions about the PC market has proven difficult for analysts, as reports from industry leaders contradict one another. Earlier this month, investors reacted harshly as Dell Computer, Apple Computer and Intel warned that demand for PC's was lighter than expected.
But many analysts backed off their dire predictions for the industry's demise after Gateway posted third-quarter financial results that met Wall Street's expectations and the company kept its bullish view of the current quarter and coming fiscal year. Then Microsoft, saying it sees no pending slowdown in the PC market, reported earnings that beat consensus estimates by 5 cents a share.
In the United States, Dell maintained its lead in market share, selling one of every five PC's, according to both reports. Compaq Computer and Hewlett-Packard held the second and third spots, though Hewlett picked up ground by improving sales 46 percent from the same period a year earlier. Gateway, International Business Machines and Apple held the fourth through sixth slots.
With a 13 percent market share, Compaq held a narrow lead in worldwide sales over Dell, which held about 11.5 percent of the market. Hewlett, I.B.M. and Fujitsu Siemens were third, fourth and fifth.
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