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To: Chuzzlewit who wrote (39073)	4/27/1998 1:02:00 AM
From: Dorine Essey	Read Replies (1) \| Respond to of 176387

First quarter PC unit data strong despite woes April 27, 1998 12:01 AM SAN FRANCISCO, April 27 (Reuters) - Personal computers had strong unit growth in the first quarter, despite pockets of big inventory buildup by some PC makers and declines in parts of Asia-Pacific and Japan, two market research firms said Monday. According to preliminary first quarter data compiled by Dataquest Inc., a market research firm based in San Jose, Calif., worldwide PC shipments rose 14.1 percent to over 21 million units, in line with its expectations. "Think back to the beginning of the quarter," said Scott Miller, a Dataquest analyst, referring to pre-announcements by both Intel Corp. INTC and Compaq Computer Corp.CPQ of earnings shortfalls. "Then rumors were abounding about massive amounts of inventory in the channel from Compaq and IBM IBM .There were concerns that the fundamentals were really going south." International Data Corp. based in Framingham, Mass., said that worldwide shipments by computer markers grew over 10 percent in the first quarter to 7.9 million. IDC's numbers are branded shipments only and exclude shipments to other distributors who add their own label and other parts. Houston-based Compaq remained in the No. 1 spot according to both Dataquest and IDC., with direct seller Dell Computer Corp DELL . as the No. 2 vendor of PCs worldwide. According to IDC, Gateway 2000 Inc. was the third largest vendor with Packard Bell NEC in fourth place. Dataquest reported that Packard Bell NEC was No. 3 and Gateway GTW was No. 4. Both firms said International Business Machines Corp. was the fifth largest PC vendor in the first quarter. "Their (IBM's) PC business was pretty hard hit," said Kevin Hause, an analyst at IDC. "They took action much earlier on...they backed off building (and let inventories come down)." In IBM's first quarter earnings report last week, the computer giant said that PC price wars had contributed to its lower first quarter net income versus the year-ago period. Dataquest, a unit of Gartner Group Inc. GART , said the U.S. market continued to grow stronger than the worldwide PC market and shipments in the United States were up 16.2 percent in the quarter. Japan continued to be weak in the quarter, and had a 10 percent drop in unit shipments, IDC said. Asia-Pacific, excluding Japan, saw a five percent drop in unit shipments, despite strength in China and Taiwan. Europe grew 21 percent. As in past quarters, the top five leaders in the PC industry continued to garner more market share, and Hewlett-Packard Co. HWP - one of the fastest growing PC makers - is likely to enter into the top five soon, analysts said. "They just barely missed out on the top five," Hause said of H-P. IDC said unit shipments at H-P grew 69 percent in the quarter, 55 percent jump at Compaq, 64 percent gain at Dell, 40 percent increase at Gateway and 12 percent at IBM. Packard Bell NEC , showed a consecutive quarter of slowing growth, with a drop of 10 percent in unit shipments. "All the big companies are in various stages of re-engineering their supply chains," said Dataquest's Miller. "In 1998, the name of the ballgame is execution. We have the major PC companies going through some wrenching changes." Dataquest still forecasts the PC market will grow 15.6 percent this year in unit shipments, but for the first time since 1987, revenues will only see single-digit growth in 1998, due to lower price points and accelerating price wars. REUTERS Top Terms of Use, and Privacy Policy. c 1996-98 Microsoft Corporation and/or its suppliers. All rights reserved. c 1998 Reuters.