Healthy Q4 Personal Computer Market Growth, Driven by
European Demand
The personal computer market maintained the solid growth it established in 1997
during the fourth quarter, according to preliminary data. Worldwide PC factory
shipments rose 14 percent over 4Q96, and 21 percent sequentially over 3Q97. In the
U.S., total PC shipments grew a healthy 15 percent over last year, and six percent
sequentially. For the full year 1997, worldwide PC factory shipments grew 15 percent
over 1996, and U.S. factory shipments increased 19 percent over the previous year.
"European sales picked up considerably during Q4, offsetting weakness in
Asia and Japan," said Kevin Hause, senior analyst in IDC's Personal
Systems research group. "Worldwide growth was also sustained by the
burgeoning sub-$1,000 consumer market, which we expect to make
further gains in the coming year."
On the vendor front, the fast-growing companies continue to pull away,
dictating industry directions and garnering resources for what will prove
to be a fierce and tumultuous market battle in 1998. Compaq solidified its
dominant role in the PC market with strong performance in the fourth
quarter, and 40 percent growth for the year. This outstanding performance
swelled worldwide market share to almost four points beyond its closest
competitor. Hewlett-Packard also sustained momentum, posting 69
percent growth worldwide, capitalizing on strong European demand.
Market Highlights
In the U.S., consumer demand was fueled by the quickly emerging $1,000
market that drew additional vendors, including IBM and Hewlett-Packard.
While home sales during the fourth quarter fell a bit short of expectations,
the commercial market continued its robust growth pattern.
European sales picked up considerably during the fourth quarter as several
countries instituted tax breaks to expand PC usage among consumers.
Aggressive pricing by leading vendors also spurred demand in the region's
largest markets to push growth for the quarter to 21 percent over the same
time period last year. Europe's strong finish helped produce 15 percent
growth for the full year, bettering its weak performance of nine percent in
1996 and restoring confidence in the region.
As Western Europe and the U.S. continued to post strong performances,
the same cannot be said for Japan. "Despite aggressive price cuts in
December, the soft Japanese economy dampened consumer demand,
which is one of the primary components in that market's dramatic
downturn," said John Brown, manager of IDC's Worldwide Quarterly PC
Market Tracker Program. "As a result, Japan turned in its second
consecutive negative growth quarter, with factory shipments 13 percent
below last year's level."
In Asia, the relative strength in key markets sustained overall PC demand,
which saw two percent sequential growth during the quarter and 11 percent
year over year. The PRC continues to be the region's bread and butter,
rebounding in the fourth quarter as corporations resumed investing and
expanding their IT projects. Amid regional turmoil Korea expects to
record the largest unit sales for the year as several vendors cut product
prices to lessen inventory before the start of 1998. While these markets
begin to rebound from the recent financial crisis there still remains a
cause for concern for PC demand in the ensuing quarters.
Fourth Quarter Review
Compaq experienced another stellar quarter, as it continued focusing on
gaining efficiencies in manufacturing and distribution. Growing strength
in its commercial offerings and the continued success of its sub-$1000
systems provided the company with the necessary sales to once again
solidify itself as the number-one vendor worldwide.
IBM maintained the number two position worldwide, as it turned in strong
performances in Western Europe and Asia. Commercial desktops and
servers continued to drive worldwide growth. The introduction of the
company's first low-cost consumer PC and renewed focus on inventory
management enabled IBM to post 42 percent sequential growth
worldwide.
Dell had another growth quarter, maintaining the company's position as a
top five vendor in the U.S. and worldwide. Commercial desktops and
servers are fueling its growth, while new initiatives like workstations
continue to ramp up.
Hewlett-Packard also had a good quarter, growing worldwide unit
shipments 69 percent. The company found growth outside of the U.S. with
its Pavilion products, capitalizing on strong consumer demand in Western
Europe. The company's portables also continue to show progress. This
sustained momentum has enabled HP to maintain its number-three ranking
worldwide.
Packard Bell NEC had another flat quarter, as building brand recognition
as a viable commercial partner continues to be a challenge as the company
transitions to its new business model. The rise of Compaq and others at
low price points in the retail channel has hurt Packard Bell's growth in
what has traditionally been its strongest segment in the consumer market.
Improved execution and consumer marketing helped Gateway 2000
capitalize on the seasonally strong consumer demand to vault into the
number-four position in the U.S. With 41 percent U.S. year-over-year
growth during the quarter, the company has established momentum for
continued success in 1998.
Table 1
Top 5 Vendors, US PC Factory Shipments, Fourth Quarter 1997
(Preliminary)
(Thousands of Units)
Q4 97
Rank
Vendor
Q4 97
Shipments
Market
Share
Q4 1996
Shipments
Market
Share
Growth
1997/96
1
Compaq
1,600
18.0%
1,052
13.7%
52%
2
Dell
909
10.2%
546
7.1%
66%
3
IBM
877
9.9%
760
9.9%
15%
4
Gateway
2000
739
8.3%
511
6.7%
45%
5
Packard
Bell NEC
710
8.0%
790
10.3%
-10%
i
Others
4,035
45.5%
4,017
52.3%
0%
i
All Vendors
8,870
100.0%
7,676
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
Source: International Data Corp., Q1 1998
Table 2
Top 5 Vendors, Worldwide PC Factory Shipments, Fourth Quarter
1997 (Preliminary)
(Thousands of Units)
Q4 97
Rank
Vendor
Q4 1997
Shipments
Market
Share
Q4 1996
Shipments
Market
Share
Growth
1997/96
1
Compaq
3,185
13.5%
2,252
10.9%
41%
2
IBM
2,334
9.9%
2,063
10.0%
13%
3
Hewlett-Packard
1,462
6.2%
865
4.2%
69%
4
Dell
1,405
6.0%
921
4.4%
53%
5
Packard Bell NEC
1,225
5.2%
1,221
5.9%
0%
i
Others
13,968
59.2%
13,380
64.6%
4%
i
All Vendors
23,579
100.0%
20,702
100.0%
14%
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., Q1 1998
Table 3
Top 5 Vendors, US PC Factory Shipments, 1997 (Preliminary)
(Thousands of Units)
1997
Rank
Vendor
1997
Shipments
Market
Share
1996
Shipments
Market
Share
Growth
1997/96
1
Compaq
5,035
16.0%
3,417
12.9%
47%
2
IBM
2,960
9.4%
1,791
6.8%
65%
3
Packard
Bell NEC
2,776
8.8%
3,030
11.4%
-8%
4
IBM
2,739
8.7%
2,196
8.3%
25%
5
Gateway
2000
2,176
6.9%
1,615
6.1%
35%
i
Others
15,791
50.2%
14,435
54.5%
9%
i
All
Vendors
31,477
100.0%
26,484
100.0%
19%
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., Q1 1998
Table 4
Top 5 Vendors, Worldwide PC Factory Shipments, 1997
(Preliminary)
(Thousands of Units)
1997 Rank
Vendor
1997
Shipments
Market
Share
1996
Shipments
Market
Share
Growth
1997/96
1
Compaq
10,064
12.6%
7,211
10.4%
40%
2
IBM
7,239
9.1%
6,176
8.9%
17%
3
Dell
4,648
5.8%
2,996
4.3%
55%
4
Hewlett-Packard
4,468
5.6%
2,984
4.3%
50%
5
Packard Bell
NEC
4,150
5.2%
4,230
6.1%
-2%
i
Others
49,369
61.8%
45,727
66.0%
8%
i
All Vendors
79,938
100.0%
69,324
100.0%
15% |
