Notebook PCs, Asia shore up Q4 PC shipments - IDC
By Eric Auchard
NEW YORK, Dec 7 (Reuters) - Surging sales of notebook computers and strong Asia-Pacific region demand in the fourth quarter helped partly offset a sharp drop in U.S. consumer desktop personal computer sales, a top market researcher will report on Thursday.
International Data Corp. of Framingham, Mass. said its revised outlook calls for worldwide PC industry shipments to reach 40.15 million in the fourth quarter, up 19.6 percent from the year earlier but down slightly from IDC's prior forecast.
``Although it's clear consumer demand in the United States is weakening, buying in other regions remains strong,'' said Loren Loverde, director of IDC's Worldwide PC Tracker program.
``The portables segment is also strong in all regions, boosting sales in both consumer and commercial markets,'' she said in statement detailing the survey's finding.
But IDC analysts cautioned that consumer demand in the United States will remain depressed for two to three quarters before accelerating again.
IDC CUTS 2001 GROWTH FORECAST TO 16.6 PERCENT WORLDWIDE
Furthermore, IDC said it had revised downward its forecasts for total PC shipment growth in 2001 to 16.6 percent worldwide, down from 18.8 percent in 2000.
IDC analyst Roger Kay said the industry research group had trimmed its forecast for worldwide fourth-quarter growth to 19.6 from the 20.3 percent that it had projected on the last occasion it revised its industry forecast in early September.
Subsequently, the PC industry has been rocked with warnings of slowing consumer sales by major computer makers and chip suppliers, including Gateway Inc. (NYSE:GTW - news), Hewlett-Packard Co.(NYSE:HWP - news) and Apple Computer Inc. (NasdaqNM:AAPL - news) most recently.
In response, Kay said in an interview that IDC was cutting its estimate for fourth-quarter consumer desktop PCs in half, to 10.2 percent growth from the year earlier, down from IDC's prior 21.2 percent growth forecast for the current quarter.
In the United States, consumer spending remained strong through the third quarter, but early warnings from both retail and direct-to-consumer PC suppliers suggested a weaker consumer market in the fourth quarter, IDC said.
A slowdown in European corporate PC sales during the third quarter had shouldered the blame for slowing growth then.
The portable computer market in the United States, Western Europe, and Asia/Pacific all strongly outperformed the research organization's expectations, with shipments growing 32 percent in the fourth quarter over the year earlier. That was on top of a 33 percent third-quarter rise from the 1999 third quarter.
Portables have picked up steam as the advantages of mobility gain ground over demand for office desktop computers used to run standard business applications, Kay said.
WINDOWS 2000 UPGRADES BREATHE LIFE INTO CORPORATE DEMAND
IDC also sees an up-tick in desktop shipments due to the long-awaited move to Windows 2000, Microsoft Corp.'s (NasdaqNM:MSFT - news) latest business computer operating system, which is kicking in after a year-long testing process at many companies.
Kay cited the emerging replacement cycle for PCs bought in 1997 and 1998 by many companies who had sped-up purchasing to secure their networks to ward off feared disruptions from possible Year 2000 bugs that largely failed to materialize.
Many of these computers are now being upgraded to newer machines in keeping with the recommended practice of replacing office PCs every three years. The replacement cycle is in turn being fed by planned upgrades to new Windows software.
``The U.S. commercial market is slowly warming,'' he said.
The portable computer market in the United States, Western Europe, and Asia/Pacific all strongly outperformed the research organization's expectations, with shipments growing 32 percent in the fourth quarter over the year earlier. That was on top of a 33 percent third-quarter rise from the 1999 third quarter.
Portables have picked up steam as the advantages of mobility gain ground over demand for office desktop computers used to run standard business applications, Kay said.
In Western Europe, consumer sales appear to be healthy while corporate sales led IDC to lower fourth-quarter expectations to a 15.1 annual growth rate for the fourth quarter, down the nearly 19 percent it had once forecast.
Revised forecasts in the Asia/Pacific region, excluding Japan, call for fourth-quarter shipment growth of 33.4 percent year-on-year for the current fourth quarter.
In Japan, fourth-quarter growth projections were revised upward to 29.4 percent year on year, following a slower than expected third quarter. Strong consumer demand from repeat and first-time buyers, as well as recovering business investments are driving the market, IDC said.
IDC said global growth is expected to slow further in the long run as both business and consumer market saturation increases among the pool of potential available buyers, and growth in emerging markets moderates.
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