Worldwide PC Market Declines for First Time Ever as Asian Markets Slow And US Slump Continues According to IDC

Japanese PC Market Grinds to a Halt as Economic Pressures Mount



Jul 19, 2001, 01:00 ET from IDC

    FRAMINGHAM, Mass., July 19 /PRNewswire/ -- The worldwide PC market was
 stagnant in the second quarter of 2001 with shipments declining by 2%.
 According to IDC research, shipments of 29.8 million were down
 7.2% sequentially as growth from Asian markets evaporated amid a continuing
 US market slump.
     The Japanese market, which managed 30% growth in 2000 in a moderate
 economic climate, gave in to worsening economic conditions.  Shipment growth
 in the second quarter of 2001 was essentially flat, as consumers and
 businesses postponed or cancelled purchases.
     "The cumulative impact of a worsening economy, declining capital
 investments, and reduced consumer spending is strongly affecting the Japanese
 market," according to Loren Loverde, director of IDC's Worldwide Quarterly PC
 Tracker. "Although the Japanese market resisted for a while, it now looks like
 the PC market in Japan will be flat to negative into 2002."
     Other Asian markets were also affected by economic and currency issues.
 China and India, which have been the primary growth engines in the region,
 slowed notably in the second quarter as consumer spending softened and
 government technology spending declined.  Growth in Australia and South Korea,
 other large markets in the region, also declined notably.
     Growth in Europe also declined although not as dramatically.  The region
 has been balancing softening consumer demand, with growing commercial
 spending.  These trends did not change dramatically in the second quarter,
 although commercial spending growth was mild, and portable PC shipments slowed
 significantly from the past several quarters bringing overall growth down.
     PC shipments in the United States were just below forecasts with a
 year-on-year decline of 8.1% and 1.3% sequentially in the second quarter of
 2001, according to IDC.  Given that average sequential growth in the second
 quarter from 1994 to 2000 has been 4.1% (with the only sequential decline
 during that period being 2000), the sequential decline from the first quarter
 of 2001 was below the historical pattern, but not a disaster.
     "Although shipment levels in the United States remain depressed, the
 seasonal pattern appears to be holding, albeit at a lower level than last
 year.  Businesses are spending cautiously, and consumers have still not
 emerged from their shells, but there is some hope that the worst is behind
 us," said Roger Kay, director of Client Computing at IDC.  "Toward the end of
 the year, we expect a modest boost from the back-to-school and holiday
 seasons, aided by a mild stimulus from Windows XP deployment, particularly in
 the home."
 
     Vendors
     Dell's aggressive pricing and ability to react quickly to changing market
 conditions allowed the market leader to further distance itself from
 competitors.  The company was alone among the top vendors in growing shipments
 and market share as its rivals struggled to preserve volume and protect
 margins.  Dell far outpaced growth in all regions, including 10% growth in its
 core U.S. market, and over 40% growth in the rapidly slowing Asian markets.
     Compaq, HP, and Gateway had a particularly tough time in the U.S. facing
 pricing pressure with continued low demand in the consumer space.  IBM
 likewise grew slower than the market in the U.S., despite a much larger
 commercial focus.  These three vendors chose not to match Dell's price
 reductions and paid the price in market share.
     Slowing consumer demand in Japan strongly affected Compaq and IBM's
 year-on-year growth as both had large shipments of low-cost consumer systems
 in Q2 2000.  Sequentially, Compaq and IBM did well in Japan, and were fairly
 close to market growth outside the U.S. and Japanese markets.
     Compaq was able to significantly reduce overall inventory during the
 quarter, which should improve the company's position going forward.  HP
 continued to do well in Europe but struggled with the slowing markets in Asia.
 Fujitsu Siemens, with sales concentrated in Germany and Japan, struggled with
 the economic conditions in these markets keeping shipments roughly flat
 year-on-year, but declining sequentially.
 
     Table 1
 
     Top 5 Vendors, U.S. PC Shipments, Second Quarter 2001 (Preliminary)
 
     (Thousands of Units)
 
     Q2 2001                     Q2 2001   Market   Q2 2000    Market   Growth
     Rank              Vendor  Shipments    Share  Shipments   Share  2001/2000
 
     1                   Dell      2,519    24.0%     2,293     20.1%     9.8%
     2                 Compaq      1,332    12.7%     1,693     14.8%   -21.3%
     3        Hewlett-Packard        991     9.4%     1,221     10.7%   -18.8%
     4                Gateway        798     7.6%       964      8.4%   -17.2%
     5                    IBM        638     6.1%       713      6.2%   -10.6%
 
                       Others      4,224    40.2%     4,542     39.8%    -7.0%
 
                  All Vendors     10,501   100.0%    11,426    100.0%    -8.1%
 
     *  Vendor shipments are branded shipments and exclude OEM sales for all
        vendors and represent shipments to distribution channels or direct to
        end users.
 
     *  Data for all vendors are reported for calendar periods.
 
     Source: IDC, July 2001
 
 
     Table 2
 
     Top 5 Vendors, Worldwide PC Shipments, Second Quarter 2001 (Preliminary)
 
     (Thousands of Units)
 
     Q2 2001                     Q2 2001   Market   Q2 2000    Market   Growth
     Rank              Vendor  Shipments    Share  Shipments   Share  2001/2000
 
     1                   Dell      3,979    13.4%     3,459     11.4%    15.0%
     2                 Compaq      3,590    12.1%     4,011     13.2%   -10.5%
     3                    IBM      2,133     7.2%     2,260      7.4%    -5.6%
     4        Hewlett-Packard      2,065     6.9%     2,260      7.4%    -8.6%
     5        Fujitsu Siemens      1,375     4.6%     1,391      4.6%    -1.1%
 
                       Others     16,641    55.9%    17,002     56.0%    -2.1%
 
                  All Vendors     29,783   100.0%    30,383    100.0%    -2.0%
 
     *  Vendor shipments are branded shipments and exclude OEM sales for all
        vendors and represent shipments to distribution channels or direct to
        end users.
 
     *  Data for all vendors are reported for calendar periods.
 
     *  Data for Fujitsu Siemens includes shipments for Fujitsu and Siemens.
 
     Source: IDC, July 2001
 
     About IDC
     IDC is the foremost global market intelligence and advisory firm helping
 clients gain insight into technology and ebusiness trends to develop sound
 business strategies. Using a combination of rigorous primary research,
 in-depth analysis, and client interaction, IDC forecasts worldwide markets and
 trends to deliver dependable service and client advice.  More than
 700 analysts in 43 countries provide global research with local content.
 IDC's customers comprise the world's leading IT suppliers, IT organizations,
 ebusiness companies, and the financial community.  Additional information can
 be found at www.idc.com .
     IDC is a division of IDG, the world's leading IT media, research and
 exposition company.
 
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 of their respective holders.
 
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