Consumer demand for PCs still strong
By The Associated Press
Last Update: 10:41 AM ET Oct 25,
SAN JOSE, Calif. (AP) -- New research finds robust consumer demand for personal computers is offsetting a lull in corporate buying that is expected to continue through year's end.
"The global
PC market is made up of many geographic, customer and product markets, many of which continue to show strong market growth."
Loren Loverde,
IDC
Third-quarter PC shipment data from research firms Dataquest and International Data Corp. show that concerns over waning worldwide demand appear to be unfounded, although companies who cater more to corporate PC sales have seen slower growth.
"Concerns about the strength of the PC market appear to be more vendor and segment specific," noted IDC analyst Loren Loverde. "The global PC market is made up of many geographic, customer and product markets, many of which continue to show strong market growth."
PC market's condition
There have been growing concerns that the era of the PC is dead. Some analysts point to market saturation, noting that slightly more than half of American households already own a computer. Competition for consumer dollars also is expected to be strong as new electronics devices come to market ahead of the holiday shopping period.
But aggressive pricing and bundling of computers with printers, scanners and monitors have produced some bright spots.
Hewlett-Packard Co.(HWP: news, msgs), for instance, saw year-over-year quarterly shipment growth of more than 40 percent domestically and worldwide as it moved aggressively in the consumer retail space. That boosted it to third place worldwide behind Compaq Computer Corp.(CPQ: news, msgs) and Dell Computer Corp.(DELL: news, msgs) and ahead of IBM Corp.(IBM: news, msgs)
Compaq and Dell continued to duel for worldwide bragging rights, with Compaq holding a 13.1 percent market share at 4.5 million units shipped, to Dell's 11.2 percent share and 3.8 million units shipped, according to Dataquest, a unit of Gartner Group.
"We have a lot of historical data that suggests next year is a period when many old (corporate) machines will
be replaced as outdated."
Charles Smulder,
Dataquest
In the U.S. market, Dell extended its lead over Compaq to capture a nearly 20 percent share, up from 17.5 percent a year ago. Dell's stock has been battered in recent weeks, however, because of slowing revenue growth due to weak European corporate demand.
Both research firms blamed the corporate slowdown on the lingering effects of Y2K spending, which reduced budgets for new computer purchases. Many computer manufacturers, however, have said in recent earnings reports that the sluggishness came mainly in Europe, reflecting concerns about high oil prices and erratic monetary fluctuation.
Yet another factor is that companies also are taking longer than originally expected to evaluate whether they will move to the Windows 2000 business operating system platform, the research firms found.
"There is no Windows 2000 tidal wave that's building here," IDC analyst Bruce Stephen said.
Still, the outlook for 2001 is good as many corporate PCs come to an end of their average three-year lifecycle, Dataquest PC analyst Charles Smulders said.
"We have a lot of historical data that suggests next year is a period when many old machines will be replaced as outdated," Smulders said. "Next year represents significant potential for PC makers."
Rounding out the top five U.S. vendors behind Dell, Compaq and HP were Gateway Inc.(GTW: news, msgs) and IBM, both research firms reported.
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