Fourth Quarter PC Growth -- Enterprise Systems

Fourth Quarter PC Growth

12/13/1999

Unit volume in the worldwide PC market this quarter is expected to grow 17% year-over-year, according to data released today by International Data Corporation (IDC). With the seasonally strong fourth quarter in full swing, PC shipments are expected to rise 15.8% from Q3 1999.

Despite earlier concerns about the impact of the Taiwan earthquake and a slowdown in corporate purchases because of Y2K, IDC's new Q4 growth forecast of 17% represents a minimal reduction of earlier projections of 20%.

"The availability of graphic chips, chipsets, and memory has tightened due to the quake, which IDC believes has put some constraint on PC supply," says John Brown, Research Director of IDC's Worldwide Quarterly PC Tracker. "But a strong, year-on-year global Q4 consumer PC growth rate of 25.7% will keep global PC demand high."

The end of the century comes to a close with a bang, as 1999 will post the highest growth since the introduction of Windows 95. A robust global consumer market, the potent combination of the Internet and ever-cheaper PCs, and a major rebound in the Asian PC market will drive a projected 1999/98 unit growth of 22.6%. For next year, IDC projects unit volume growth of 18.3% over 1999 as commercial demand picks up, consumer demand stays strong, and the shortages of LCD panels dissipate.

The biggest geographic rebound of the year centered on Japan, which has exhibited 30% or higher growth over the first three quarters of the year. This quarter Japan is projected to post 30% growth over the year-earlier period. The Asia/Pacific (excluding Japan) region will also show strong demand as price erosion, low PC penetration rates, and the untapped small and medium business market drive PC sales in the quarter.

In the United States, IDC expects Q4 growth to reach 12.9% due to a strong year-earlier quarter, PC supply issues related to the Taiwan earthquake, and some dampening in corporate demand due to Y2K issues. For total year 1999, the United States is expected to show growth of 23.5% over 1998. Growth for 2000 is projected at a 19.5%.

In Western Europe, Q4 year-over-year unit growth is pegged at 14.1%, with sequential volumes up 55% as retail competition and Internet demand will drive consumer sales.

IDC believes the key to vendor growth this quarter is related to strategic alignment with growing consumer and small business segments. In addition, positioning in the Western Europe, U.S., and Asia/Pacific markets will be important. Finally, solid Internet strategies and the ability to deliver portable PCs in volume will also be keys to growth. Vendors that appear to have the "right stuff" for growth this quarter are Dell, Gateway, Hewlett-Packard, and Apple.

For more information, see the tables below, or visit www.idc.com.

Table 1

Top 5 Vendors, U.S. PC Shipments, Third Quarter 1999

(Thousands of Units)

Q3 1999		Q3 1999	Market	Q3 1998	Market	Growth
Rank	Vendor	Shipments	Share	Shipments	Share	1999/98

1	Dell	2,119	17.8%	1,340	14.1%	58%
2	Compaq	1,802	15.2%	1,502	15.8%	20%
3	Gateway	1,081	9.1%	781	8.2%	39%
4	Hewlett-Packard	985	8.3%	809	8.5%	22%
5	IBM	920	7.8%	869	9.1%	6%

	Others	4,945	41.7%	4,221	44.3%	17%

	All Vendors	11,854	100.0%	9,521	100.0%	25%

Shipments are branded factory shipments and exclude OEM sales for all vendors.

Data for all vendors are reported for calendar periods.

Data for Compaq shipments include Digital Equipment shipments; data for Acer includes Texas Instruments.

Source: International Data Corporation, 1999

Table 2

Top 5 Vendors, Worldwide PC Shipments, Third Quarter 1999

(Thousands of Units)

Q3 1999		Q3 1999	Market	Q3 1998	Market	Growth
Rank	Vendor	Shipments	Share	Shipments	Share	1999/98

1	Compaq	3,865	13.7%	3,195	14.2%	21%
2	Dell	3,250	11.5%	2,033	9.1%	60%
3	IBM	2,262	8.0%	2,025	9.0%	12%
4	Hewlett-Packard	1,863	6.6%	1,481	6.6%	26%
5	NEC/PB NEC	1,447	5.1%	1,457	6.5%	-1%

	Others	15,467	54.9%	12,263	54.6%	26%

	All Vendors	28,156	100.0%	22,454	100.0%	25%