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Sunday January 31 1:47 AM ET
World Fourth-Quarter PC Shipments Rebound--Surveys
By Eric Auchard
NEW YORK (Reuters) - Worldwide personal computer shipments picked up their pace in the fourth-quarter to grow 15 percent versus the fourth-quarter a year-ago, salvaging a year that began with an inventory glut and struggled with economic turmoil in many emerging markets, market researchers said.
By contrast, worldwide PC market shipments rose 12 percent for the 1998 year as a whole compared to 1997, according to survey data to be released Friday by market researcher firm International Data Corp. (IDC) of Framingham, Mass.
Fourth quarter results were fueled by traditional holiday consumer buying and heavy Internet demand in the United States and Europe, found the IDC report, and a second, separate survey by research firm Dataquest, also to be released Friday.
Compaq Computer Corp. (NYSE:CPQ - news) remained the No. 1 PC supplier, both in the world and in the United States, while IBM clung to the No. 2 world rank despite rapid gains by fast-growing Dell Computer Corp. (Nasdaq:DELL - news) At its torrid pace, Dell could soon overtake PC pioneer IBM in the No. 2 spot worldwide, IDC's data showed.
For the full year, worldwide PC factory shipments totaled 90 million, with Compaq accounting for 13.2 million of the PC units, IDC said.
''It was a big fourth quarter, with 27 million units shipped worldwide,'' said John Brown, manager of IDC's PC market research group. ''We'd originally forecast 12 percent growth, but a surge in the U.S. and Europe propelled year-to-year growth in the fourth quarter to 15 percent,'' he said.
In the United States, Compaq's market share dropped slightly to 18.1 percent from the 19 percent share it held in fourth quarter 1997, while Dell sustained its momentum, rising to a 12.8 percent share from 9.9 percent a year-ago.
Gateway edged ahead of IBM to take No. 3 spot in the United States, both with 9.1 percent of the market, while Hewlett-Packard Co. (NYSE:HWP - news) was No. 5 with 7.2 percent.
Underlying the shifting market were sharply contrasting growth rates, as Compaq grew between 16 and 17 percent both in the U.S. and worldwide from fourth quarter to fourth quarter, while Dell gained 56 percent in the same timeframe.
Such figures tell only a partial story, since industry researchers track shipments and not revenues. While shipments continue to grow in healthy double-digits, tumbling computer prices have cut into revenue growth, not to mention profitability for some struggling computer makers.
Still, healthy market share gains were posted by the world's top brands, with the top four -- Compaq, IBM, Dell and H-P, in that order -- accounting for 42.5 percent of all PCs shipped.
The exception was No. 5 Packard Bell NEC, which has continued to see its position slide as year-to-year growth slipped 3 percent. Its worldwide market share stands only a fraction of a percent ahead of fast-growing No. 6 PC maker Gateway Inc, according to Dataquest.
U.S. fourth-quarter unit shipments grew 21 percent, versus forecasted growth of 18 percent, amid a surge in demand for Internet connections at home and sharply falling PC prices, IDC said. Western Europe grew 19 percent.
The United States and European PC markets accounted for nearly 65 percent of 1998 PC shipments, Dataquest estimated.
''It appears that over half of U.S. households now have a PC,'' Dataquest analyst Bill Schaub said, adding that his firm's surveys show that up to 37 percent of the U.S. now has an Internet connection. ''Interest in the Internet is driving a lot of demand in the home market.''
Japan's growth was flat and Asia's was slightly negative, while Eastern European PC shipments fell about 20 percent year-to-year, IDC's Brown said.
In a statement, Compaq focused on its sequential gains in the fourth-quarter versus the third-quarter of 1998.
Compaq's global market share grew to 15.4 percent, up from the third quarter's 14.4 percent. Compaq's U.S. market share grew to 18.1 percent from 15.8 percent in the third-quarter, while Dell's share slipped to 12.8 percent from 14.1 percent.
Compaq's gains reflect its strength as the leading supplier of consumer PCs during the seasonally strong holiday sales season, and Dell's minor role in the consumer market compared to its focus on the corporate market, analysts said.
Schaub said it was more meaningful to compare fourth quarter results with the year-ago fourth quarter, which eliminates some of seasonal differences.
''Compaq gets an extra consumer bump that Dell doesn't get in the fourth quarter but don't let that obscure the fact that Dell is basically right on their tail,'' Dataquest's Schaub said.
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