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IDC Reports Strong Outlook for Fourth Quarter Personal Computer Market, Despite Weak Asian Market
PR Newswire - December 09, 1997 07:30
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MOUNTAIN VIEW, Calif., Dec. 9 /PRNewswire/ -- Despite troubled Asian
economies, the global personal computer market will continue to display good
growth in the fourth quarter of 1997, according to unit forecast data released
today by International Data Corporation. With strong performances in the U.S.
and other regions outside of Asia, IDC forecasts 15 percent growth for the
worldwide PC market.
Coming off strong third quarter growth of 20 percent, the U.S. market will
sustain this pattern in Q4 with expected 21 percent growth. A healthy
economic picture coupled with a booming market for low-cost consumer PCs
should trigger a strong holiday buying season. In 1998, the U.S. is expected
to continue its strong performance with unit growth of 17 percent, outpacing
the worldwide rate of 13.5 percent.
In contrast, the outlook in the Asia/Pacific and Japanese PC markets has
grown gloomier. IDC believes the currency crisis that started in Southeast
Asia in the third quarter and later caused ripples throughout the region will
alter PC demand in Q4 and into 1998. The primary effects of currency
devaluation on PC demand include higher prices, lower government spending,
decreased consumer demand and a lack of credit to fuel PC expansion. These
restraints will slow Asia/Pacific (excluding Japan) PC growth to 14 percent in
the fourth quarter compared to more than 20 percent growth for the last two
quarters. The worst effects of the crisis are largely limited to the ASEAN
countries. While market slowdowns will be severe in some Southeast Asian
markets (particularly Thailand, Indonesia and the Philippines) growth in the
region's largest markets is expected to remain strong.
IDC also expects PC growth to slow considerably in 1998, and has lowered
its 1998 forecast from 12.93 million to 12.36 million unit shipments. Primary
inhibitors will continue to be Southeast Asia and Korea, while the PRC, India
and Australia will bear more of the burden for regional PC growth. A slowdown
in any of there markets, particularly China, would cause a severe regional PC
market slowdown in 1998.
In Japan, a slight recovery is expected during the fourth quarter after a
discouraging third quarter in which sales declined 11 percent. However, year-
over-year PC growth for Q4 is still projected to be negative (-6%), and Japan
will finish 1997 with near-flat unit volume compared to 1996. Next year, the
Japanese market is expected to post modest positive unit growth of five
percent.
Despite an unstable consumer market in many of its countries, Western
Europe will maintain healthy growth of 12 percent in Q4 compared to the same
time period a year ago. In 1998, the Western Europe PC market is forecast to
show a decline in growth to eight percent.
With growth in other areas weakening, emerging markets are starting to
become more important as they show better-than-average market increases. In
the fourth quarter, Eastern Europe, Middle East and Africa and Latin America
PC markets are all expected to grow 20 percent or more.
Vendor Outlook
The so-called "big four" group of vendors (Compaq, IBM, Hewlett-Packard,
and Dell) continue to dominate the industry comprising more than 40 percent
and 35 percent of third quarter unit volume in the U.S. and worldwide markets,
respectively. As the market continues to show signs of accelerated
consolidation, IDC believes the big four in Q4 and 1998 will continue to pull
further away from the pack.
Compaq, the top-ranked PC vendor in the U.S. and worldwide, is showing
increased market strength through its strong position across a diverse set of
geographies, customer segments and platforms in the third quarter, for
example, Compaq was number one in the U.S. home, business, and government
markets. Compaq had 19 percent share in the U.S. and 14 percent worldwide in
the third quarter, and widened its lead over the number two vendor by nine
points domestically and almost six points worldwide.
Compaq's big Texas rival Dell continued its string of impressive growth
quarters in Q3, propelling the company into the number two rank in the U.S.
and number three vendor worldwide. IDC believes Dell is positioned for
further growth via its fast-growing PC server and workstation initiatives as
well as expansion opportunities in the portable and consumer arenas.
Another high-flyer among the big four is Hewlett-Packard, which during Q3
grew its worldwide unit shipments in excess of 60 percent and U.S. shipments
by 70 percent. The company found growth in both commercial and consumer
segments, as the more widely available and aggressively-priced Pavilion line
showed market strength that should continue going forward. Long absent from a
major position in the portable market, IDC believes 1998 could prove to be a
"bust out" year for H-P in that segment.
The final member of the big four, IBM , held on to the number two spot
worldwide with 8.4 percent share in the third quarter, as commercial desktops,
portables, and servers did well. The company was also able to hold onto its
leadership position in Asia Pacific for the fourth consecutive quarter with
7.4 percent market share. However, the company's consumer business dampened
growth worldwide as the Aptiva line was caught without a product in the fast-
growing, low-cost desktop market. With the introduction of its low-cost PC in
the fourth quarter and anticipated pricing actions around the world IBM should
show signs of recovery in the consumer market in the fourth quarter.
Table 1
Top 5 Vendors, US PC Shipments, Third Quarter 1997
(Thousands of units)
Q397 Q3 1997 Market Q3 1996 Market Growth
Rank Vendor Shipments Share Shipments Share 1997/96
1 Compaq 1,578 18.8% 943 13.5% 67%
2 Dell 812 9.7% 495 7.1% 64%
3 Packard Bell
NEC 681 8.1% 722 10.4% -6%
4 IBM 660 7.9% 615 8.8% 7%
5 Hewlett-
Packard 629 7.5% 348 5.0% 80%
Others 4,017 48.0% 3,851 55.2% 4%
All Vendors 8,377 100.0% 6,975 100.0% 20%
Shipments are branded shipments and exclude OEM sales for all vendors
Data for all vendors are reported for calendar periods
Data for Packard Bell NEC includes shipments for Packard Bell, NEC, and
ZDS
Source: International Data Corp., 12/97
Table 2
Top 5 Vendors, Worldwide PC Shipments, Third Quarter 1997
(Thousands of units)
Q397 Q3 1997 Market Q3 1996 Market Growth
Rank Vendor Shipments Share Shipments Share 1997/96
1 Compaq 2,770 14.1% 1,810 10.7% 53%
2 IBM 1,641 8.4% 1,508 8.9% 9%
3 Dell 1,209 6.2% 796 4.7% 52%
4 Hewlett-
Packard 1,168 6.0% 695 4.1% 68%
5 Packard Bell
NEC 980 5.0% 1,002 5.9% -2%
Others 11,846 60.4% 11,082 65.7% 7%
All vendors 19,614 100.0% 16,929 100.0% 16%
Shipments are branded shipments and exclude OEM sales for all vendors
Data for all vendors are reported for calendar periods
Data for Packard Bell NEC includes shipments for Packard Bell, NEC, and
ZDS
Data for Packard Bell NEC does not include NEC Japan or NEC China
Source: International Data Corp., 12/97
About IDC
Headquartered in Framingham, Mass., International Data Corporation
provides IT market research and consulting to more than 3,900 high-technology
customers around the world. With a global network of 300 analysts in more
than 40 countries, IDC is the industry's most comprehensive resource on
worldwide IT markets, products, vendors, and geographies.
IDC/LINK, an IDC subsidiary, researchers and analyzes the home computing
market, leading-edge technologies in telecommunications and new media, and the
convergence of computing and consumer electronics.
IDC's World Wide Web site ( idc.com ) contains additional
company information and recent news releases and offers full-text searching of
recent research.
IDC is a division of International Data Group, the world's leading IT
media, research and exposition company.
All product and company names may be trademarks or registered trademarks
of their respective holders.
SOURCE International Data Corporation
/CONTACT: John Brown, 650-962-6478, jbrown@idcresearch.com or Bruce
Stephen, 508-935-4584, bstephen@idcresearch.com, or Dara Queen, 508-935-4585
dqueen@idcresearch.com/
/Company News On-Call: prnewswire.com or fax, 800-758-5804,
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/Web site: idcresearch.com and idc.com
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